Analysts’ Beauty and Performance

Management Science

53 Pages Posted: 18 Mar 2019

See all articles by Ying Cao

Ying Cao

The Chinese University of Hong Kong (CUHK) - School of Accountancy

Feng Guan

Shanghai University of Finance and Economics - School of Accountancy

Zengquan Li

Shanghai University of Finance and Economics - School of Accountancy

Yong George Yang

The Chinese University of Hong Kong (CUHK) - Faculty of Business Administration

Date Written: February 26, 2019

Abstract

We study whether sell-side financial analysts’ physical attractiveness is associated with their job performance. We find that attractive analysts make more accurate earnings forecasts than less attractive analysts. Moreover, more attractive analysts make stock recommendations that are more informative in the short run and more profitable in the long run. Further analyses reveal that attractive analysts attain their better job performance at least partly through their privileged access to information from firm management. For the sources of the beauty effect, we find that more attractive analysts gain more media exposure, have better connections to institutional investors, and receive more internal support from their employers. Additional evidence suggests that analysts’ physical appearance per se at least partly explains our findings. Overall, our study demonstrates that physical attractiveness has a profound impact on the job performance and information access of sell-side financial analysts.

Keywords: Beauty premium; financial analyst; analyst forecast

JEL Classification: G10, G23, M40

Suggested Citation

Cao, Ying and Guan, Feng and Li, Zengquan and Yang, Yong George, Analysts’ Beauty and Performance (February 26, 2019). Management Science. Available at SSRN: https://ssrn.com/abstract=3341835

Ying Cao

The Chinese University of Hong Kong (CUHK) - School of Accountancy ( email )

Shatin, N.T.
Hong Kong

Feng Guan

Shanghai University of Finance and Economics - School of Accountancy

No. 777 Guoding Road, Shanghai
Shanghai, 200433
China

Zengquan Li

Shanghai University of Finance and Economics - School of Accountancy ( email )

No. 777 Guoding Road, Shanghai
Shanghai, 200433
China

Yong George Yang (Contact Author)

The Chinese University of Hong Kong (CUHK) - Faculty of Business Administration ( email )

Shatin, N.T.
Hong Kong

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