Analyst coverage, optimism, and stock price crash risk: Evidence from China
Kam C. Chan and
Pacific-Basin Finance Journal, 2013, vol. 25, issue C, 217-239
We examine the relations among analyst coverage, analyst optimism, and firm-specific stock price crash risk. Using a unique Chinese database, we find that an increase in a firm's analyst coverage leads to an increase in stock price crash risk and this positive relation is more pronounced when analysts are more optimistic analysts and are affiliated with investment banks and brokerage firms with mutual funds relation. We also find some weak evidence to suggest that analyst optimism on crash risk is less pronounced when analysts have high personal reputations or are affiliated with reputable brokerage firms.
Keywords: Analyst optimism; Crash risk; Conflict of interest; Reputation (search for similar items in EconPapers)
JEL-codes: G00 G24 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:25:y:2013:i:c:p:217-239
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Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee
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