Brokerage M&As and the peer effect on analyst forecast accuracy

Lan Thi Mai Nguyen, Chee Seng Cheong and Ralf Zurbruegg

International Review of Financial Analysis, 2021, vol. 73, issue C

Abstract: We examine whether the impact of a change in the number of analysts a brokerage firm employs has an asymmetric effect on the forecasting ability of superior and inferior analysts. Specifically, we show that following brokerage M&As only superior analysts benefit from a rise in having a larger number of peers. In addition, we find that the market does not account for the improved performance among superior analysts, and argue that this creates an opportunity for investors to capitalize on this.

Keywords: Peer effect; Forecast accuracy; Broker M&A; Analyst ability (search for similar items in EconPapers)
JEL-codes: G14 G24 J24 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:73:y:2021:i:c:s105752192030291x

DOI: 10.1016/j.irfa.2020.101650

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