Exchange-Sponsored Analyst Coverage

65 Pages Posted: 24 Apr 2017

See all articles by Ru Gao

Ru Gao

The University of Queensland

Lakshmanan Shivakumar

London Business School

Baljit K. Sidhu

UNSW Australia Business School, School of Accounting

Date Written: April 21, 2017


Several major stock exchanges, including the NASDAQ and NYSE Euronext, have recently embarked on schemes to sponsor and promote analyst coverage for firms listed on their exchanges. We evaluate the efficacy of one such scheme pioneered by the Singapore Exchange (SGX). We find that sponsored analysts produce forecasts with similar bias, but lower accuracy than those issued by analysts voluntarily following a firm. In analyses that control for self-selection into the SGX Scheme, we find that sponsored firms enjoy at best minor improvements in their information environments and stock liquidity. Any benefits accruing from the Scheme are insufficient to make sponsored firms fully comparable to those of firms with voluntary analyst following on the measured attributes.

Keywords: Analyst Coverage, Stock Exchange Sponsored, Information Environment, Liquidity

JEL Classification: M40, G14, G24

Suggested Citation

Gao, Ru and Shivakumar, Lakshmanan and Sidhu, Baljit K., Exchange-Sponsored Analyst Coverage (April 21, 2017). Available at SSRN: or

Ru Gao

The University of Queensland ( email )

Colin Clark, 39 Blair Dr,
St Lucia QLD
Brisbane, Queensland 4607
61 07 3443 4502 (Phone)

Lakshmanan Shivakumar (Contact Author)

London Business School ( email )

Regent's Park
London, NW1 4SA
United Kingdom
+44 20 7000 8115 (Phone)
+44 20 7000 8101 (Fax)


Baljit K. Sidhu

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052

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