The market for information—evidence from finance directors, analysts and fund managers

Richard Barker

Accounting and Business Research, 1998, vol. 29, issue 1, 3-20

Abstract: The theoretical distinction between information efficiency and fundamental efficiency suggests an important question for accounting research, which is whether (and to what extent) there exists an equilibrium mechanism whereby fund managers investment decisions can be fully informed. This question is approached in this paper by means of developing a grounded theory of the market for information. The theory is derived from a (mostly interview-based) empirical analysis of the economic incentives of finance directors, analysts and fund managers with respect to stock market information flows. The evidence suggests a two-part theory. First, it is argued that ‘raw’ data flowing directly from companies is of considerably greater importance to fund managers than ‘processed’ data generated by analysts. Second, analysts are nevertheless argued to play an important role in the market for information, as both mechanisms of information efficiency and as providers of benchmarks for consensus valuation. This theory implies that the research literature has paid insufficient attention to the role of accounting information in direct communication between companies and fund managers and, related to this, that the role of analysts in share price determination has been overstated and only superficially understood.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://hdl.handle.net/10.1080/00014788.1998.9729563 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:acctbr:v:29:y:1998:i:1:p:3-20

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RABR20

DOI: 10.1080/00014788.1998.9729563

Access Statistics for this article

Accounting and Business Research is currently edited by Vivien Beattie

More articles in Accounting and Business Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().