Double edged coverage? The impact of the analyst coverage network on stock price volatility
Lixiang Wang,
Zhiyi Fang,
Jia Wen and
Qi Zhou
Pacific-Basin Finance Journal, 2025, vol. 91, issue C
Abstract:
Given that investors exhibit greater sensitivity to bad price volatility compared to positive volatility, this paper investigates how securities analysts asymmetrically influence both volatility types. By constructing an analyst coverage network, we find that brokerage analysts enhance good volatility through effective stock identification but exacerbate bad volatility due to their structural hole advantage. In contrast, clique analysts exhibit herding effects that mitigate bad volatility while reducing their stock identification ability, diminishing good volatility. Additionally, star analysts show similar mechanisms. For firms with poor information transparency, brokerage analysts rely more on trading volume for stock identification, which strengthens good volatility but also amplifies losses. This paper extends the research on analyst coverage and also provides practical implications for analyst behavior regulation in the capital market.
Keywords: Analyst coverage network; Stock price volatility; Good volatility; Bad volatility (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X25000903
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:91:y:2025:i:c:s0927538x25000903
DOI: 10.1016/j.pacfin.2025.102753
Access Statistics for this article
Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee
More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().