The activities of buy-side analysts and the determinants of their stock recommendations

Lawrence D. Brown, Andrew C. Call, Michael B. Clement and Nathan Y. Sharp

Journal of Accounting and Economics, 2016, vol. 62, issue 1, 139-156

Abstract: We survey 344 buy-side analysts from 181 investment firms and conduct 16 detailed follow-up interviews to gain insights into the activities of buy-side analysts, including the determinants of their compensation, the inputs to their stock recommendations, their beliefs about financial reporting quality, and the role of sell-side analysts in buy-side research. One important finding is that 10-K or 10-Q reports are more useful than quarterly conference calls and management earnings guidance for determining buy-side analysts׳ stock recommendations. Our results also suggest that sell-side analysts add value by providing buy-side analysts with in-depth industry knowledge and access to company management.

Keywords: Buy-side analysts; Stock recommendations; Compensation; Sell-side analysts; Private communication; Industry knowledge JEL Classifications: G10, G11, G23, M40 (search for similar items in EconPapers)
JEL-codes: G10 G11 G23 M40 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:62:y:2016:i:1:p:139-156

DOI: 10.1016/j.jacceco.2016.06.002

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