This paper develops a new approach to distinguishing clustering in analyst forecasts due to the causal influence of one analyst's forecast on another from clustering due to a common response to correlated information. We apply this approach by studying how analysts who currently provide...

Burgstahler and Eames (2003) present evidence that analysts commonly anticipate earnings management to avoid small losses, but often incorrectly predict its occurrence. Here we consider whether the market's behavior mimics that of analysts. Our results suggest that analysts exhibit more forecast...

We study the tournament behavior of sell-side analysts under proper timing and show that a strong non-monotonic relationship exists between analysts' relative forecasting performance early in the tournament and their later deviations from consensus. Given that the highest performers earn...

Certain corporate transactions (eg. insider purchases and buyback announcements) are known to be robust predictors of firm-level returns. However, I empirically show equity analysts largely ignore such informative, yet subtle, signals of stocks they cover. A trading strategy that follows...

We examine whether the informativeness of sell-side analyst reports depends on the strength of the regulatory environment of a country and the regulatory background of the institutional investors of a company. Our analyses are based on more than 600,000 analyst reports from 2005 through 2010...

This study examines the relationship between the value of financial analysts' recommendations and the intensity of firms' research and development (R&D) expenditures. We conduct univariate, portfolio and regression analyses using a sample of 8,620 public firms for the period 1993-2004. The...

We document that a stock's price around a recommendation or forecast covaries with prices of other stocks the issuing analyst covers. The effect of shared analyst coverage on stock price comovement extends beyond analyst activity days. A stock's daily returns covary with the returns of other...

We demonstrate that time stamps reported in I/B/E/S for analysts' recommendations released during trading hours are systematically delayed. Using newswire-reported time stamps, we find 30-minute returns of 1.83% (-2.10%) for upgrades (downgrades), but for this subset of recommendations we find...

Firms covered by more analysts are more likely to become takeover targets and more likely to enter deals in which their acquirers initiate private merger negotiations. Moreover, when equity analysts' pre-acquisition price forecasts imply greater target undervaluation, target firms are more...

We assess the magnitude and mechanisms of workers' productivity spillovers by estimating the peer effects among those working in the same occupation across firms using the setting of security analysts. The empirical design exploits one feature of social networks: the existence of partially...