The determinants of analyst-firm pairings

Lihong Liang, Edward J. Riedl, Ramgopal Venkataraman

Research output: Contribution to journalArticle

6 Scopus citations

Abstract

This paper explores the determinants of observed analyst-firm pairings. We adopt an analyst/brokerage house perspective that allows us to examine not only firm-level characteristics as in prior research, but also attributes of the analyst and the analyst's brokerage house that may drive these pairings. Our empirical analyses provide two primary insights. First, analyst characteristics such as industry expertise and relative experience, and brokerage house characteristics such as continuity of coverage, are associated with the decision to follow a firm. Second, there is substantial variation in the association between firm, analyst, and brokerage house characteristics and the decision to follow a firm; this occurs across individual analysts as well as across different types of brokerage houses. Overall, our results provide further insights into the factors leading to observed analyst-firm pairings, and indicate that these factors vary across analysts and their brokerage houses - suggesting richer associations than the average firm-level relationships documented by prior research.

Original languageEnglish (US)
Pages (from-to)277-294
Number of pages18
JournalJournal of Accounting and Public Policy
Volume27
Issue number4
DOIs
StatePublished - Jul 2008

Keywords

  • Analyst following
  • Analyst forecasts
  • Financial analysts
  • Firm coverage

ASJC Scopus subject areas

  • Accounting
  • Sociology and Political Science

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