Intrafirm Knowledge Sharing in the Investment Research Industry

Artur Hugon (), An-Ping Lin () and Stanimir Markov ()
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Artur Hugon: W. P. Carey School of Accountancy, Arizona State University, Tempe, Arizona 85287
An-Ping Lin: School of Accountancy, Singapore Management University, Singapore 178900
Stanimir Markov: Naveen Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080

Management Science, 2024, vol. 70, issue 4, 2427-2446

Abstract: We study interdepartment knowledge sharing in an investment research setting where the benefits are potentially significant for the brokerage and the capital market, but so are the frictions impeding it. Using hand-collected data on equity analyst access to in-house debt research expertise, we find significant benefits to equity analysts in the form of improved ability to forecast cash flows and to anticipate credit rating downgrades. Moreover, we find evidence that access to management and research expertise underlie in-house debt analysts’ capacity to generate information beneficial to equity analysts. Finally, these benefits exist only in the presence of a collaborative brokerage culture or debt-equity analyst collocation, consistent with these factors promoting knowledge sharing in the investment research industry.

Keywords: knowledge sharing; equity analysts; debt analysts; cash flow forecasts; credit ratings (search for similar items in EconPapers)
Date: 2024
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