Access to Management and the Informativeness of Analyst Research

• In Event: Financial Analysts I

Abstract

We study the effects of broker-hosted investor conferences on the informativeness of analyst research. We find analysts’ stock recommendations have significantly larger price impacts when the broker has a conference-hosting relationship with the firm. The incremental effect is most pronounced in the quarter following the conference and remains significant for three quarters. The post-conference effect is stronger for small, volatile stocks and when the analyst has more experience covering the firm. Analysts at brokers with a conference-hosting relation also issue more accurate earnings forecasts than non-hosts in the post-conference period. Our findings suggest access to management remains an important source of analysts’ informational advantage following the passage of Regulation Fair Disclosure.

Authors

• Clifton Green, Emory University

• Russell Jame, The University of New South Wales

• Stanimir Markov, The University of Texas at Dallas

• Musa Subasi, University of Missouri–Columbia