Anatomy of the Financial Analyst Rankings
We investigate the analyst rankings of Institutional Investor (I/I) and The Wall Street Journal (WSJ) in 1994-2001. We find that investment recommendation performance is a significant determinant of the rankings. The positive effect of earnings forecast accuracy on the rankings documented in prior research is significant even after adjusting for a variety of other factors. However, other determinants that have a primary component of recognition are generally much more important. Compared to other analysts in the year after becoming stars: (1) the forecasts of I/I stars are significantly more accurate—but only by a modest amount, and those of WSJ stars are not different; (2) the recommendations of I/I stars perform nobetter and those of WSJ stars perform significantly worse. Further, the behavior of both I/I and WSJ stars is generally consistent with that predicted by herding theories on the basis of career concerns over continuing to be a star (e.g., taking less risk in investment recommendations).
Douglas R. Emery Xi Li
Department of Finance, University of Miami
国际会议
西安
英文
2006-07-17（万方平台首次上网日期，不代表论文的发表时间）