Tournaments of financial analysts

Yin, Hang; Zhang, Huai

doi:10.1007/s11142-013-9255-6

Cited by 45 publications

(15 citation statements)

References 42 publications

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“…According to Yin and Zhang (2014) little is documented in the literatures concerning the financial analysts" environment and its effect on their decision. Beyer et al (2010) reviewed the decisions that influence corporate information environment in the stock markets as: mandatory regulatory disclosure, voluntary disclosure and analysts reporting decisions.…”

Section: Analysts' Information Environmentmentioning

confidence: 99%

Financial Analysts' Processing of Financial Reporting Information in Emerging and Frontier Markets

Jehu

Ibrahim

2016

JAFEE

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Objective: The purpose is to establish the relationship between the analysts' stock valuation, the reporting environment and the stock recommendations. And to investigate the process of incorporating both quantitative and qualitative information into their forecasts. Methodology: The research will be archival, obtaining historical information from DataStream, Stock Exchanges and MSCI. A survey will also be carried out to corroborate findings, as the analysts' valuation process may not be obtained through desk research. Results: The results are expected to show evidence for the incentive conflicts of the analysts' decisions with regards to the peculiarities of the macroeconomic environments under consideration. Implication: The write up has implications for sell-side analysts where they have perceived incentive conflicts when they make recommendations. The research contributes to the argument on the conflicts of interest analysts face in forecasting earnings and making recommendations within the markets peculiar environment.

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Section: Analysts' Information Environmentmentioning

confidence: 99%

Financial Analysts' Processing of Financial Reporting Information in Emerging and Frontier Markets

Jehu

Ibrahim

2016

JAFEE

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“…Lastly, this study has practical implications for analysts who want to build their forecasting reputation. In order to attraction attention from the market and investors, an analyst has a motivation to distinguish himself from other analysts by issuing bold/salient forecasts (Zhuang 2011;Yin and Zhang 2012). However, unless the analyst is extremely confident in the reliability of his/her private information and his/her own forecasting ability, there is a risk of issuing a bold forecast (Hong et al 2000;Kadous et al 2009).…”

Section: Discussionmentioning

confidence: 99%

“…1 I use the construct of -boldness salience‖ rather than -boldness uniqueness‖ to be consistent with analysts' forecast incentive literature to better motivate the study, as recent studies show that bold forecasts can result from analysts' incentive to be more salient than the peer analysts to attract market attention (Yin and Zhang 2012;Zhuang 2011). Specifically, the term -boldness salience‖ better reflects the relationship between boldness and salience.…”

Section: Introductionmentioning

confidence: 99%

“…3 A bold and unique forecast, which is very salient, 4 can make the analyst issuing the forecast stand out from the pack and gain attention from the market (Prendergast and Stole 1996). It is especially true when we consider analysts' competition as a kind of tournament, where a small proportion of (winner) analysts take away most of the benefits (Yin and Zhang 2012;Zhuang 2011). Prior studies usually use forecast boldness, the deviation from the consensus forecast, to proxy for forecast boldness salience, without considering the uniqueness of the forecast (i.e., whether there are other analysts with similar forecasts).…”

Section: Introductionmentioning

confidence: 99%

“…Recent archival research indicates that analysts' competition can be regarded as one kind of tournament game, and that those analysts who have more incentives to win the tournament are more likely to issue bold forecasts(Lott and Loosevelt 2005;Zhuang 2011;Yin and Zhang 2012).…”

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confidence: 99%

See 2 more Smart Citations

Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing

Zhou¹

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In this study, I conduct an experiment to investigate how financial analysts' forecast boldness salience and forecast timing jointly influence investors' willingness to pay for investment advice, holding constant the accuracy of the forecast. I consider forecast boldness salience to refer to the extent that the magnitude of the analyst's forecast stands out from that made by others in terms of its boldness (magnitude of the forecast relative to the average forecast made by others) and uniqueness (whether there are other individual forecasts that are close or similar to this forecast). Forecast timing refers to whether analysts issue their forecasts earlier or later relative to other analysts. I find that for an early analyst, investors' willingness to pay for advice increases once his/her forecast is confirmed by the follower analyst(s). In contrast, for a late analyst, investors' willingness to pay for advice decreases if his/her forecast is nonbold. My results enrich our understanding on the joint effect of forecast characteristics on investor reaction to analysts' forecasts. I show that the effect of analysts' forecast boldness is contingent on both forecast uniqueness and forecast timing. My study has practical implications on forecasting strategies for financial analysts.

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Out of the shadow? The effect of high‐status employee departure on the performance of staying coworkers in financial brokerage firms

Wang,

Hu,

Liu

2023

Human Resource Management

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Because high‐status employees make disproportional contributions to firms, prior literature suggests that their departure would undermine various organizational outcomes. Building on recent literature, however, we suspect that a high‐status employee may have seized disproportional resources and credits from coworkers, thereby restricting them from performing, particularly when the work context is more independent and contested. As a result, the departure of a high‐status employee may bring staying coworkers more resources and incentives to perform, causing their performance to improve. To test this possibility, we examine the effect of high‐status analysts' departure on the individual performance of analysts who remain, using a sample of sell‐side analysts in Chinese financial brokerage firms. Employing a before‐and‐after treatment research design, we find evidence that after the departure of a high‐status analyst, the staying coworkers' individual performance is significantly improved. It is particularly so when they share greater industry overlap with the departing analyst. Our extensional analyses also investigate additional contingencies, which helps provide valuable hints about possible mechanisms.

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Tournaments of financial analysts

Cited by 45 publications

References 42 publications

Financial Analysts' Processing of Financial Reporting Information in Emerging and Frontier Markets

Financial Analysts' Processing of Financial Reporting Information in Emerging and Frontier Markets

Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing

Out of the shadow? The effect of high‐status employee departure on the performance of staying coworkers in financial brokerage firms

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