Why Do Firms Disclose Analyst Following on Their Corporate Websites?

Forthcoming in Accounting and Business Research

44 Pages Posted: 26 Jun 2023

See all articles by Afshad J. Irani

Afshad J. Irani

Washington and Lee University

Irene Karamanou

University of Cyprus - Department of Public and Business Administration

Date Written: June 20, 2023

Abstract

About two-thirds of S&P500 firms disclose their analyst following on their corporate websites. Half of these firms disclose their analyst following in an unbiased fashion, while the rest manage this disclosure by selectively omitting analysts with pessimistic views (selective disclosers). Consistent with facing stronger incentives to manage expectations, coupled with weaker information environments and monitoring by external stakeholders, selective disclosers exhibit lower profitability, higher growth opportunities, stronger financing needs and a greater percentage of retail investor ownership. Moreover, selective disclosers experience lower future returns and exhibit higher income smoothing and lower accrual quality. Taken together, our evidence is consistent with some firms attempting to serve their strategic needs by selectively excluding from their websites analysts with less favorable views of their firm.

Keywords: Disclosure, Analyst Following, Corporate Websites

JEL Classification: G30, G32, G38, M40

Suggested Citation

Irani, Afshad Jeevan and Karamanou, Irene, Why Do Firms Disclose Analyst Following on Their Corporate Websites? (June 20, 2023). Forthcoming in Accounting and Business Research, Available at SSRN: https://ssrn.com/abstract=4486526

Afshad Jeevan Irani

Washington and Lee University ( email )

204 West Washington Street
Lexington, VA 24450
United States
5404588628 (Phone)

Irene Karamanou (Contact Author)

University of Cyprus - Department of Public and Business Administration ( email )

1 Panepistimiou Ave.
Nicosia CY-2109
Cyprus
+357 22 893608 (Phone)
+357 22 895475 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
70
Abstract Views
289
Rank
636,115
PlumX Metrics