Analyst coverage and the quality of corporate investment decisions

To, TY; Navone, M; Wu, E

Analyst coverage and the quality of corporate investment decisions

To, TY Navone, M

Wu, E

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Publication Type:: Journal Article
Citation:: Journal of Corporate Finance, 2018, 51 pp. 164 - 181
Issue Date:: 2018-08-01

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Field	Value	Language
dc.contributor.author	To, TY	en_US
dc.contributor.author	Navone, M https://orcid.org/0000-0002-6273-1808	en_US
dc.contributor.author	Wu, E	en_US
dc.date.issued	2018-08-01	en_US
dc.identifier.citation	Journal of Corporate Finance, 2018, 51 pp. 164 - 181	en_US
dc.identifier.issn	0929-1199	en_US
dc.identifier.uri	http://hdl.handle.net/10453/129986
dc.description.abstract	© 2018 In this paper, we examine the effect of financial analysts on the quality of corporate investment decisions. We show that greater analyst coverage leads to higher total factor productivity within firms, a finding that is robust after using both an instrumental variable approach and an experimental design that exploits exogenous reductions in analyst coverage due to broker mergers and closures. We further identify that the positive effect of analysts on firm-level productivity emanates from their critical role in information distribution and external monitoring within more opaque and financially constrained firms and also firms with weaker investor protection.	en_US
dc.relation.ispartof	Journal of Corporate Finance	en_US
dc.relation.isbasedon	10.1016/j.jcorpfin.2018.06.001	en_US
dc.subject.classification	Finance	en_US
dc.title	Analyst coverage and the quality of corporate investment decisions	en_US
dc.type	Journal Article
utslib.citation.volume	51	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access
pubs.publication-status	Published	en_US
pubs.volume	51	en_US

Abstract:

© 2018 In this paper, we examine the effect of financial analysts on the quality of corporate investment decisions. We show that greater analyst coverage leads to higher total factor productivity within firms, a finding that is robust after using both an instrumental variable approach and an experimental design that exploits exogenous reductions in analyst coverage due to broker mergers and closures. We further identify that the positive effect of analysts on firm-level productivity emanates from their critical role in information distribution and external monitoring within more opaque and financially constrained firms and also firms with weaker investor protection.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/129986