Do Analysts Cater to Investor Information Demand?

Miran Hossain, Benjamin A. Jansen and Jon Taylor

No 202003, Working Papers from Middle Tennessee State University, Department of Economics and Finance

Abstract: We extend analyst following literature by investigating whether analysts cater coverage towards investor information demand. Results suggest analyst following increases during the months in which a firm’s stock ticker experiences abnormal information demand from investors, while the association is marginally negative in the following month. However, the magnitude of the contemporaneous positive association is greater than the magnitude of the proceeding negative association. This implies that analysts respond to information demand shocks, but partially revert their coverage after the abnormal information demand subsides. Furthermore, our results suggest that analysts cater their coverage more towards institutional investors, relative to retail investors.

Keywords: Analyst Coverage; Information Demand; Institutional Investor; Retail Investor (search for similar items in EconPapers)
JEL-codes: G14 G23 G24 G29 (search for similar items in EconPapers)
Date: 2020-03
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Persistent link: https://EconPapers.repec.org/RePEc:mts:wpaper:202003

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