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Rev Account Stud (2015) 20:173209 DOI 10.1007/s11142-014-9298-3
Lynn Rees Nathan Sharp Brady Twedt
Published online: 21 June 2014 Springer Science+Business Media New York 2014
Abstract This study examines the determinants of nancial analyst coverage in the business press and the effects of such coverage on analysts careers. Using a sample of business press articles that quote a nancial analyst, we compare each cited analyst with the other analysts who were actively following the same rm and could have been cited by the reporter but were not. In general, we nd that analysts quoted in the business press are more likely to possess characteristics that prior research has found to be positively associated with analyst quality and that higher quality analysts are allotted more space in the articles. However, we cannot rule out the possibility that at least some of our analyst quality measures capture the effects of familiarity. After controlling for analyst quality and article tone, we nd that analysts with unfavorable stock recommendations are more likely to be cited than analysts with favorable recommendations. We provide evidence of signicant career benets for analysts who receive publicity in the business press, which suggests that the press is a source of valuable exposure for analysts.
Keywords Financial analysts Business press Analyst career outcomes Capital
markets
JEL Classication G10 G24 J30 M41
L. Rees (&) N. Sharp
Texas A&M University, 4353 TAMU, College Station, TX 77843-4353, USA e-mail: [email protected]
N. Sharpe-mail: [email protected]
B. Twedt
Indiana University, 1275 East 10th Street, Bloomington, IN 47405, USA e-mail: [email protected]
Whos heard on the Street? Determinantsand consequences of nancial analyst coverage in the business press
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174 L. Rees et al.
If people in Wichita or Omaha or Seattle saw me quoted in The Wall Street Journal, they would be more likely to give me credit for my knowledge of the industry. And then I potentially get to foster a relationship with them, and build my clients that way.
All-star analyst Helane Becker1
1 Introduction
Prior research documents that the business press plays an important role in the dissemination of information within capital markets (Engelberg and Parsons 2011; Bushee et al. 2010; Miller 2006), and studies have found signicant effects on rm value from the news contained in business press...