The impact of analyst coverage and stock price synchronicity: Evidence from brokerage mergers and closures✰

Kaijuan Gao, Wanfa Lin, Li Yang and Kam C. Chan

Finance Research Letters, 2020, vol. 33, issue C

Abstract: We examine the impact of analyst coverage on stock price synchronicity using exogenous shocks of brokerage mergers and closures in a sample of Chinese firms. This approach effectively mitigates endogeneity between analyst coverage and stock price synchronicity. Our findings suggest that after brokerage mergers and closures, the reduced analyst coverage leads to a decrease in stock price synchronicity by using a difference-in-differences research design. Hence, greater analyst coverage likely only produces market-wide rather than firm-specific information in emerging markets.

Keywords: Analyst coverage; Synchronicity; Brokerage mergers and closures (search for similar items in EconPapers)
JEL-codes: G0 G1 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:33:y:2020:i:c:s1544612319300145

DOI: 10.1016/j.frl.2019.05.008

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