Journal of Accounting and Economics
Volume 60, Issues 2–3, November–December 2015, Pages 141–160
What is the value of sell-side analysts? Evidence from coverage initiations and terminations
Kevin K. Lia, Haifeng Youb
Management Forecast对于股市的影响。
(1) Initiations和terminations有影响
(2) changes in information asymmetry 不一定
Abstract
We investigate three potential channels of analyst value creation: improving fundamental performance through monitoring, reducing information asymmetry, and increasing investor recognition. We show that changes in investor recognition have consistent explanatory power for the market reaction to coverage initiations and terminations but find mixed evidence for changes in information asymmetry and no evidence for changes in fundamental performance as determinants of the market reaction. These results suggest that analysts create value for firms under their coverage by improving their investor recognition and not by monitoring or reducing information asymmetry.
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