Economic policy uncertainty and analyst behaviours: Evidence from the United Kingdom

Chen, Min; Zhu, Zhaobo; Han, Peiwen; Chen, Bin; Liu, Jia

doi:10.1016/j.irfa.2021.101906

Cited by 21 publications

(6 citation statements)

References 66 publications

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“…First, to the best of our knowledge, no study in the analyst literature has examined the effect of rising Economic Policy Uncertainty on optimism reflected in analyst output. The findings of Chang and Choi (2017), Pascual Gonz alez (2021) and Chen et al, (2022) come close to our study. Chang and Choi (2017) explore change in optimism due to Volatility Index, Pascual Gonz alez (2021) limits the scope to eight financial institutions in Spain, and Chen et al (2022) examine the scenario in the United Kingdom, analyzing the other aspects of analyst output like accuracy, dispersion, but not optimism.…”

Section: Introductionsupporting

confidence: 91%

Section: Introductionsupporting

confidence: 89%

“…, (2022) come close to our study. Chang and Choi (2017) explore change in optimism due to Volatility Index, Pascual González (2021) limits the scope to eight financial institutions in Spain, and Chen et al. (2022) examine the scenario in the United Kingdom, analyzing the other aspects of analyst output like accuracy, dispersion, but not optimism.…”

Section: Introductionmentioning

confidence: 99%

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Analyst optimism, uncertainty and regulation: evidence from the Indian market

Singla

Chakraborty

Singh

2023

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PurposeThe study examines the effect of increased Economic Policy uncertainty on analyst optimism in the Indian market. The study also explores whether the SEBI Research Analyst Regulation, 2014, has effectively contained the optimistic nature of analysts.Design/methodology/approachThe study is based on firms in the Indian market. The sample period is 2003–2020. It runs a linear panel regression to measure the impact of Economic Policy uncertainty on the optimism level of analysts' forecasts and recommendations, controlling for firm fixed effects. Further, the impact of the SEBI Research Analyst Regulation, 2014, has been assessed with the help of the difference-in-difference approach.FindingsThe Economic Policy uncertainty is significantly and positively related to the analyst optimism, reflected in the forecast bias and recommendation in the Indian context. The experience of analysts and the age of the firm positively drive optimism. However, introducing the Research Analyst Regulation by SEBI led to a decline in analyst optimism. The regulation decoupled the analysts' compensation from brokerage service transactions. Thus, the results suggest that the regulation has effectively curbed the incentive to produce optimistic output.Originality/valueThis is the first study in the Indian market to assess the impact of uncertainty on analyst output. It also investigates the effectiveness of the first analyst-specific regulation in India, i.e. The Research Analyst Regulation, 2014.

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Section: Introductionsupporting

confidence: 91%

Section: Introductionsupporting

confidence: 89%

Section: Introductionmentioning

confidence: 99%

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Analyst optimism, uncertainty and regulation: evidence from the Indian market

Singla

Chakraborty

Singh

2023

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“…Previous studies have analyzed the effect of firm characteristics (e.g., ownership structure, firm size, and number of business lines) (Bhushan, 1989), transparency of corporate disclosure policy (Bai, 2009), corporate diversification (Litov et al, 2012), corporate spinoffs behaviors (Feldman, 2016), introduction of high-speed railways (Q. Yang et al, 2019), and economic policy uncertainty (M. Chen, Zhu, et al, 2022) on AC. Under the background of DT, we deem that the execution of digital strategies may trigger additional AC because the investors' demand for analysts and the willingness of analysts to actively follow companies will also increase.…”

Section: Acmentioning

confidence: 99%

The impact of digital transformation on corporate innovation: Roles of analyst coverage and internal control

Zhou,

Xu,

Liu

2023

Manage Decis Econ

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It is critical to explore the mechanisms by which digital transformation (DT) influences firms' innovation performance (IP) in the pervasive digital epoch. This study constructs a serial mediation model to test the underlying mechanism of how DT affects IP. We find that DT can promote IP significantly, and such impact is heterogeneous. Mechanism tests reveal that analyst coverage and internal control quality have the serial mediation effects in the path of DT affecting IP. These findings still hold after several robustness checks. Our discoveries provide new theoretical and practical implications to the DT and innovation research domains.

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“…Existing studies show that local political and policy uncertainty have significant impact on analyst behaviors, especially in the U.S. and U.K. (e.g., Baloria and Mamo, 2017;Chen et al, 2022;Chourou, Purda, and Saadi, 2021;Chen et al, 2022).…”

Section: Introductionmentioning

confidence: 99%