Exchange-sponsored analyst coverage

Gao, R, Shivakumar, L and Sidhu, B K (2018) Exchange-sponsored analyst coverage. Contemporary Accounting Research, 35 (2). pp. 734-766. ISSN 0823-9150 OPEN ACCESS


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.

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Item Type: Article
Subject Areas: Accounting
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© 2018 The Canadian Academic Accounting Association. This is the peer reviewed version of the following article: Gao R, Shivakumar L, Sidhu B K (2018) 'Exchange-sponsored analyst coverage', Contemporary Accounting Research, which has been published in final form at 10.1111/1911-3846.12410. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

Date Deposited: 24 Apr 2017 08:43
Date of first compliant deposit: 21 Apr 2017
Subjects: Market forecasting
Securities markets
Last Modified: 18 Jul 2024 01:48

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