What Determine Financial Analysts' Career Outcomes During Mergers?

62 Pages Posted: 17 Jul 2007 Last revised: 9 Oct 2008

Joanna S. Wu

University of Rochester - Simon Business School

Amy Zang

Hong Kong University of Science and Technology - Department of Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: October 7, 2008

Abstract

We investigate the effects of mergers on the career outcomes of financial analysts. We hypothesize and find that analysts with good earnings forecast performance experience higher turnover during mergers, target analysts are more likely to turnover and the existence of a competing analyst in a merger counter party also increases analyst turnover. We analyze the promotion of analysts to research executive positions and find that analysts with greater experience and especially experienced stars are more likely to be promoted. Finally, we document that analyst turnover is associated with decreases in research quality at the merged firms post-merger.

Keywords: analyst quality, earnings forecast accuracy, turnover, merger, I/B/E/S

JEL Classification: D23, G10, G24, G29, J24, J33, M41

Suggested Citation

Wu, Joanna and Zang, Amy, What Determine Financial Analysts' Career Outcomes During Mergers? (October 7, 2008). Simon School Working Paper No. FR08-07. Available at SSRN: https://ssrn.com/abstract=1000282 or http://dx.doi.org/10.2139/ssrn.1000282

Joanna Wu (Contact Author)

University of Rochester - Simon Business School ( email )

Carol Simon Hall 3-160D
Rochester, NY 14627
United States
585-275-5468 (Phone)
585-442-6323 (Fax)

Amy Zang

Hong Kong University of Science and Technology - Department of Accounting ( email )

LSK Business School Building
Clear Water Bay, Kowloon
Hong Kong
+852-23587561 (Phone)

HOME PAGE: http://www.AmyZang.org

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