Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 31, 2022 erstellt
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Beschreibung:
We study financial analysts’ role in influencing managers’ ability to learn from stock prices to make investment decisions. Our findings suggest that analysts increase managerial learning from prices. This effect is more pronounced when analysts are of higher quality, when the firm’s information environment is weaker, and when managers are more likely to rely on external information. Our main inferences are robust to employing brokerage house mergers and closures to identify plausibly exogenous reductions in analyst coverage. We also document that the nature of analysts’ influence on managerial learning is not static over time. Specifically, we find that analysts appear to have decreased managerial learning prior to Regulation Fair Disclosure and other major changes to financial markets that occurred around the turn of the century. Overall, our findings contribute to the literature related to the benefits of analyst coverage in capital markets and the real economy