Changes in analyst following for less covered firms accompanying Regulation Fair Disclosure: the roles of ability and industry experience

Chen, Hueiling; Huang, Cheng Tsu; Lin, Hsiou Wei

doi:10.1007/s11156-014-0477-x

Cited by 5 publications

(3 citation statements)

References 35 publications

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“…Studies report that RegFD drastically changed the analyst industry. During the post-RegFD period, analysts invested more effort in information discovery (Mohanram and Sunder 2006), had lower informativeness in their outputs (Gintschel and Markov 2004) and lower accuracy in their reports (Findlay and Mathew 2006), and altered their company-following patterns (Chen, Huang, and Lin 2016). In 2002, the SEC settled with 10 of the largest investment banks in GRAS.…”

Section: Alternative Periodsmentioning

confidence: 99%

Do Analysts Who Move Markets Have Better Careers?

Balashov

2018

J of Financial Research

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In this article I investigate the association between analysts’ ability to issue influential recommendations and their career outcomes. The fraction of recommendations that are defined as influential are linked to a higher probability of an analyst moving to a higher status brokerage house, and a lower probability of either being demoted to a lower status brokerage house or leaving the profession. Analysts who more often issue influential recommendations also have a higher chance of being ranked by Institutional Investor All‐America, having longer careers, and experiencing lower job turnover compared to peers.

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Section: Alternative Periodsmentioning

confidence: 99%

Do Analysts Who Move Markets Have Better Careers?

Balashov

2018

J of Financial Research

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“…Corporate site visits (CSVs) are an important way for market participants, such as investors, analysts, and the media, to acquire valuable information about firms (Brown et al, 2015). CSVs are especially important in China, because many Chinese listed firms operate in an opaque information environment (Chen et al, 2016; Morck et al, 2000). Unlike traditional communication channels such as conference calls, during which top executives mainly address earnings and other financial metrics and then answer questions from investors and analysts, site visits allow in-depth communication with a wide range of employees and direct observation of firms’ operating activities and facilities.…”

Section: Introductionmentioning

confidence: 99%

Do Corporate Site Visits Constrain Real Earnings Management?

Broadstock

Chen

Cheng

et al. 2022

Journal of Accounting, Auditing & Finance

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This study investigates the relationship between corporate site visits (CSVs) and firms’ real earnings management. Using a unique dataset of site visits to Chinese firms listed on the Shenzhen Stock Exchange from 2009 to 2016, we find that such visits are negatively associated with firms’ real earnings management. The results are robust to using alternative CSV measures, controlling for alternative communication channels, and using the propensity score matching method. In cross-sectional analyses, we find that the negative association between site visits and real earnings management is stronger for more complex firms and firms with greater information asymmetry. In addition, we find that CSVs are negatively associated with both management and corporate misconduct but not with accrual-based earnings management or restatements.

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“…We also consider the impact of Regulation Fair Disclosure (FD), which prohibits firms from selectively releasing private information to analysts. Absent private information from management, analysts have to incur higher information acquisition and/or processing costs to maintain forecast accuracy, and as a result, they might be less willing to cover firms (Irani and Karamanou 2003;Mohanram and Sunder 2006;Chen et al 2016). We therefore use an indicator variable for the post-FD period (fd) in our regression.…”

Section: Multivariate Tests Of H1mentioning

confidence: 99%

The impact of corporate tax avoidance on analyst coverage and forecasts

Ren

Taffler

2019

Rev Quant Finan Acc

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Corporate tax avoidance is likely to be associated with a high level of earnings management and with high financial opacity in the time-series. On this basis, we hypothesize that analyst coverage is negatively associated with corporate tax avoidance. Our results confirm this conjecture, and are robust to using a firm-fixed-effects model and a quasi-natural experiment to control for potential endogeneity. Additional analysis shows that analyst coverage is negatively related to tax risk, but there is no evidence that the informativeness of, or errors in, analyst forecasts are associated with tax avoidance. Overall, our study advances understanding of the implications of corporate tax avoidance for analyst behavior.

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Changes in analyst following for less covered firms accompanying Regulation Fair Disclosure: the roles of ability and industry experience

Cited by 5 publications

References 35 publications

Do Analysts Who Move Markets Have Better Careers?

Do Analysts Who Move Markets Have Better Careers?

Do Corporate Site Visits Constrain Real Earnings Management?

The impact of corporate tax avoidance on analyst coverage and forecasts

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