Exchange-sponsored analyst coverage

Gao, R and Shivakumar, L and Sidhu, B K (2017) Exchange-sponsored analyst coverage. Contemporary Accounting Research. ISSN 0823-9150 (Submitted)

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Abstract

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.

Item Type: Article
Additional Information: © 2017 The Canadian Academic Accounting Association
Subjects: S > Securities markets
Subject Areas: Accounting
Date Deposited: 24 Apr 2017 08:43
Last Modified: 08 Aug 2017 16:28
URI: http://lbsresearch.london.edu/id/eprint/816

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