How do experienced analysts improve price efficiency? *

AC Akyol (First Author), YM Qian (Participant Author), F Yu (Participant Author)

科研成果: 期刊稿件期刊论文

3 引用 (Web of Science)

摘要

We document that return anomalies related to management discretions are mitigated for firms followed by more experienced analysts. Nonetheless, only experience directly covering the firm matters while experience covering other firms is not associated with greater price efficiency. Focusing on the accrual anomaly, we then examine research and monitoring as possible channels through which experience mitigates mispricing. For firms followed by more experienced analysts, we find that forecast revisions and stock prices respond more positively to the accrual component of earnings. We further find that accrual quality is higher in firms followed by more experienced analysts, which holds after using both propensity score matching and exogenous events of brokerage closures and mergers to control for endogeneity. Collectively, our results are consistent with monitoring being the primary mechanism by which experienced analysts reduce accrual mispricing.
源语言英语
文章编号106798
页数20
期刊Journal of Banking and Finance
149
DOI
出版状态已出版 - 4月 2023

Corresponding author email

yiming.qian@uconn.edu

关键词

  • Accrual anomaly
  • Accrual quality
  • Experience
  • Financial analysts

成果物的来源

  • ABDC-A*
  • SSCI

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