“…I'm having that sort of dialogue. ( SS 33 )That analysts have such robust conversations with target companies suggests that they effectively act as “sparring partners” not just for the BS (zu Knyphausen‐Aufseß et al ) but for company management as well. Indeed, there is a logical sequence to events here, with robust conversations held with company management appearing to be solid preparation for similar conversations with the BS:It's much more of a thought process behind it which is of interest to them.…”
Section: Resultsmentioning
confidence: 99%
“…Overall, analysts clearly require more than just substantive expertise about companies and industries. SS analysts and their BS clients can be thought of as “sparring partners” (zu Knyphausen‐Aufseß et al , 1170), with the latter relying on the former to build a portfolio of different perspectives (Giorgi and Weber ).…”
“…The impact of these changes on SS analysts, and their practices, has, as yet, been largely unexplored. Additionally, while for many years SS analysts have enjoyed high status and impressive salaries (Wansleben ), the field has witnessed the rise of in‐house BS analysts over time (zu Knyphausen‐Aufseß et al ).…”
This paper explores the ways in which sell‐side (SS) financial analysts seek to position themselves advantageously within the wider field of investment advice in spite of widespread skepticism over the value that their forecasts and recommendations add to investment decisions. The field of investment advice has been characterized in recent years by a number of regulatory and technological changes that have forced SS analysts to reconstitute the ways in which they influence the investment decisions of buy‐side (BS) actors. Faced with existential threats, SS analysts have responded to the disruptive impact of technology and regulation by struggling hard to ensure that their services are still valued by fund managers. Key to this ongoing process is the recalibration of professional expertise, which previous research has alluded to but not explored in detail. Central to the persistence of SS analysts in processes of investment decision making are activities revolving around the production and use of analyst reports which, our findings indicate, are less valuable for their informational content than their role as “relational devices,” ascribing legitimacy to SS analysts and earning them an entry ticket to more substantive, value‐adding interactions with companies and BS actors. We also show that economic considerations in the area of investment advice are influenced by social ties, the motivations of various actors in the field, and their relative position vis‐à‐vis other actors. More generally, we contribute to the literature on professional projects by showing how professional groups are constantly engaged in attempts to reposition themselves in the social space, but that field‐level changes can restrict the outcomes of these strategies to mitigation rather than advancement for the professionals concerned.
“…I'm having that sort of dialogue. ( SS 33 )That analysts have such robust conversations with target companies suggests that they effectively act as “sparring partners” not just for the BS (zu Knyphausen‐Aufseß et al ) but for company management as well. Indeed, there is a logical sequence to events here, with robust conversations held with company management appearing to be solid preparation for similar conversations with the BS:It's much more of a thought process behind it which is of interest to them.…”
Section: Resultsmentioning
confidence: 99%
“…Overall, analysts clearly require more than just substantive expertise about companies and industries. SS analysts and their BS clients can be thought of as “sparring partners” (zu Knyphausen‐Aufseß et al , 1170), with the latter relying on the former to build a portfolio of different perspectives (Giorgi and Weber ).…”
“…The impact of these changes on SS analysts, and their practices, has, as yet, been largely unexplored. Additionally, while for many years SS analysts have enjoyed high status and impressive salaries (Wansleben ), the field has witnessed the rise of in‐house BS analysts over time (zu Knyphausen‐Aufseß et al ).…”
This paper explores the ways in which sell‐side (SS) financial analysts seek to position themselves advantageously within the wider field of investment advice in spite of widespread skepticism over the value that their forecasts and recommendations add to investment decisions. The field of investment advice has been characterized in recent years by a number of regulatory and technological changes that have forced SS analysts to reconstitute the ways in which they influence the investment decisions of buy‐side (BS) actors. Faced with existential threats, SS analysts have responded to the disruptive impact of technology and regulation by struggling hard to ensure that their services are still valued by fund managers. Key to this ongoing process is the recalibration of professional expertise, which previous research has alluded to but not explored in detail. Central to the persistence of SS analysts in processes of investment decision making are activities revolving around the production and use of analyst reports which, our findings indicate, are less valuable for their informational content than their role as “relational devices,” ascribing legitimacy to SS analysts and earning them an entry ticket to more substantive, value‐adding interactions with companies and BS actors. We also show that economic considerations in the area of investment advice are influenced by social ties, the motivations of various actors in the field, and their relative position vis‐à‐vis other actors. More generally, we contribute to the literature on professional projects by showing how professional groups are constantly engaged in attempts to reposition themselves in the social space, but that field‐level changes can restrict the outcomes of these strategies to mitigation rather than advancement for the professionals concerned.
“…Besides minimizing the information asymmetry between investors and issuers (Boot et al, 2006), research emphasizes that the alphanumeric rating code also reflects to which degree an issuer fulfills the criteria of an ideal investment (Blume et al, 1998; see also Nicolai et al, 2010, p.162). Given the growing dependence of companies and sovereignties on the capital market (Barnes, 1987; Meyer & Rowan, 1977; see also Chiang, Jeon, & Li, 2007; Dore, 2008; Knyphausen‐Aufseß, Mirow, & Schweizer, 2011; Lazonick, 2007; O'Sullivan, 2010; Shleifer & Vishny, 1997), this review therefore illustrates the grounds to this proposition by categorizing the identified body of literature into two distinctive clusters. From a static perspective , research classifies levers with superior relevance to a rating outcome, as for example, profitability ratios.…”
Section: Five Themes Most Critical To Key Stakeholders Of Creditmentioning
This paper gives an extensive overview on the avenues academic research has taken in exploring the role of credit ratings. In doing so, it relies on a strict methodological approach for the collection and evaluation of relevant studies to address the criticisms on the lack of profoundness in prior literature reviews in business research. It provides therefore to both academics and practitioners an exhaustive compendium on the role and relevance of credit ratings for each key stakeholder over the past 40 years. Second, it pinpoints specifically to how credit ratings impact corporate strategy. In this matter, it suggests to focus on this underresearched aspect in future as it has become a critical factor in the decision‐making of company boards.
“…That managers take actions to facilitate intangibles investments against the background of near‐term performance pressures is supported, for example, by Connelly, Hoskisson, Tihanyi, and Certo (), who reported that companies such as Coca‐Cola regularly communicate about intangible investments to investors, enabling investors to more accurately forecast company performance, and that such companies have been reducing the frequency of their earnings reports, seeking to attract investors with longer‐term interests. Similarly, a study of investor relations at Siemens described the firm's communication with investors and securities analysts (capital market mediators who recommend stock to investors), efforts of managers to explain their decisions and how they expect them to affect company performance in the near and longer term, and the challenges that managers face in taking actions they deem necessary while they are not always compatible with expectations in the capital market (zu Knyphausen‐Aufseß, Mirow, & Schweizer, ). More generally, it has been established that managers are important information sources for securities analysts (Chen & Matsumoto, ; Kuperman, ; Lev, ; Ramnath, Rock, & Shane, ).…”
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