Analyst effort allocation and firms' information environment

• Main Authors: WANG, Rong, HARFORD, Jarrad, JIANG, Feng, XIE, Fei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: Sell-side analysts; Effort allocation; Limited attention; Career concerns; Earnings forecast; Stock recommendation; Firm information environment; Labor market outcomes; Corporate Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5305; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6304/viewcontent/SSRN_id2947193.pdf
• Institution: Singapore Management University

We show that a firm’s information environment is significantly impacted by the characteristics of the other firms its analysts cover. Analysts strategically allocate effort among portfolio firms by devoting more effort to firms that are relatively more important for their career concerns. Specifical...