TY - JOUR
T1 - Do changes in star selection criteria affect analyst behaviour?
AU - Kim, Karam
AU - Ryu, Doojin
AU - Yu, Jinyoung
N1 - Publisher Copyright:
© 2024 Investment Analysts Society of South Africa.
PY - 2024
Y1 - 2024
N2 - This study examines whether the star analyst selection criteria affect analysts’ coverage decisions and the informativeness of their reports. We focus on a change to the star evaluation criteria that increased the importance of quantitative standards. After the reform, analysts tend to cover firms with smaller sizes, lower profitability, lower growth, and higher systematic risk. We find that post-reform analyst coverage is positively associated with both the level of and change in stock price synchronicity, indicating that analyst reports provide market-wide information.
AB - This study examines whether the star analyst selection criteria affect analysts’ coverage decisions and the informativeness of their reports. We focus on a change to the star evaluation criteria that increased the importance of quantitative standards. After the reform, analysts tend to cover firms with smaller sizes, lower profitability, lower growth, and higher systematic risk. We find that post-reform analyst coverage is positively associated with both the level of and change in stock price synchronicity, indicating that analyst reports provide market-wide information.
KW - analyst coverage
KW - firm-specific characteristics
KW - market-wide information
KW - star analyst
KW - stock price synchronicity
UR - http://www.scopus.com/inward/record.url?scp=85186478096&partnerID=8YFLogxK
U2 - 10.1080/10293523.2024.2312709
DO - 10.1080/10293523.2024.2312709
M3 - Article
AN - SCOPUS:85186478096
SN - 1029-3523
JO - Investment Analysts Journal
JF - Investment Analysts Journal
ER -