Abstract

http://ssrn.com/abstract=1571418
 
 

References (44)



 
 

Footnotes (3)



 


 



The 'Real' Value of Conflicted Analyst Coverage


Stacey E. Jacobsen


Southern Methodist University (SMU) - Edwin L. Cox School of Business - Department of Finance

Irina Stefanescu


Federal Reserve Board, Washington D.C.

Xiaoyun Yu


Indiana University - Kelley School of Business - Department of Finance; China Academy of Financial Research (CAFR)

January 2, 2013


Abstract:     
This paper examines whether conflicted analyst research affects the firms under coverage. We develop a novel approach to identify a sample of firms whose coverage is mostly driven by analysts’ private incentives to generate investment banking revenue. We find that conflicted analyst coverage is recognized by investors and its loss has little adverse effect on information efficiency, capital investment, cost of capital, and equity issuance. Our results suggest that firms attain little benefit when offering investment banking business in exchange for analyst coverage.

Number of Pages in PDF File: 57

Keywords: Conflicts of interest, sell-side research, Global Research Settlement, analyst coverage incentives, loss of analyst coverage, information asymmetry.

JEL Classification: G12, G14, G18, G24

working papers series





Download This Paper

Date posted: March 18, 2010 ; Last revised: May 14, 2014

Suggested Citation

Jacobsen, Stacey E. and Stefanescu, Irina and Yu, Xiaoyun, The 'Real' Value of Conflicted Analyst Coverage (January 2, 2013). Available at SSRN: http://ssrn.com/abstract=1571418 or http://dx.doi.org/10.2139/ssrn.1571418

Contact Information

Stacey E. Jacobsen
Southern Methodist University (SMU) - Edwin L. Cox School of Business - Department of Finance ( email )
P.O. Box 750333
Dallas, TX 75275-0333
United States
Irina Stefanescu (Contact Author)
Federal Reserve Board, Washington D.C. ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
Xiaoyun Yu
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3521 (Phone)
812-855-5875 (Fax)

China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

Feedback to SSRN


Paper statistics
Abstract Views: 659
Downloads: 115
Download Rank: 145,292
References:  44
Footnotes:  3

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.313 seconds