 Independent analyst research: Does it matter who pays?William L. Buslepp, Ryan J. Casey and G. Ryan Huston Advances in accounting, 2024, vol. 66, issue C Abstract: On April 28, 2003, ten of the largest investment banks reached an agreement with the Securities and Exchange Commission and other regulatory bodies regarding alleged misconduct of security analysts. This agreement, called the Global Research Analyst Settlement, allocated $460 million to source independent analyst research. Unlike other forms of analyst research, this research was not financed through investment banking or trading commissions and was theoretically “unbiased research”. We compare independent research funded by the Global Settlement to research provided by the same firms that was not funded by the Global Settlement. Research funded by the Global Settlement appears to be of lower quality than non-funded research produced by the same set of firms, suggesting that unbiased research does not necessarily generate higher quality research. More specifically, we find that quality declined in the later years of the Global Settlement period when there was no expectation of future funding for this research, commonly referred to as the horizon effect. Keywords: Independent research; Global research analyst settlement; Analyst recommendations; Analyst forecasts (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:66:y:2024:i:c:s0882611023000597 DOI: 10.1016/j.adiac.2023.100700 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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