The Real Effects of Analyst Research Quality: Evidence from the Adoption of the Broker Protocol
I provide empirical evidence that labour market frictions have an adverse effect on the quality of analyst research. Using the staggered, voluntary adoption of the Protocol for Broker Recruiting (Protocol) since 2004, I show that, without non-compete agreements, financial analysts produce more accur...
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| Tipo de documento: | artigo |
| Data de publicação: | 2023 |
| País: | España |
| Recursos: | Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya) |
| Repositório: | Recercat. Dipósit de la Recerca de Catalunya |
| OAI Identifier: | oai:recercat.cat:20.500.14342/4985 |
| Acesso em linha: | https://hdl.handle.net/20.500.14342/4985 http://doi.org/10.1111/auar.12397 |
| Access Level: | Acceso aberto |
| Palavra-chave: | Broker Recruiting |
| Resumo: | I provide empirical evidence that labour market frictions have an adverse effect on the quality of analyst research. Using the staggered, voluntary adoption of the Protocol for Broker Recruiting (Protocol) since 2004, I show that, without non-compete agreements, financial analysts produce more accurate forecasts and exert greater efforts in updating their research more frequently. Consistent with the notion that information asymmetry in the capital market are lower in the post-Protocol period, I provide empirical evidence and argue that the research coverage by Protocol members enables managers to access capital and extend their investment opportunities. My findings suggest that analyst coverage by Protocol members has a favourable effect on investment in innovative projects, production capacity and acquisitions. |
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