The role of the business press in the pricing of analysts’ recommendation revisions
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AbstractWe investigate the information-dissemination role of the business press by examining the coverage of analyst recommendation revisions. Consistent with the press providing wider dissemination of analyst reports, we find evidence that coverage of analyst recommendation revisions significantly increases the initial market reaction to these revisions and decreases the subsequent price drift. Furthermore, we find that news flash coverage, rather than in-depth coverage, of a recommendation revision drives both the initial market reaction results and drift results. Finally, we show that broader press coverage influences the activities of large-trade institutional investors but not high-frequency traders. Overall, our findings suggest a complementary role between analysts and the business press: increased dissemination of recommendation revisions, rather than information creation on the part of the business press, serves to better inform the market about analyst recommendation revision decisions.
Acceptance Date07/01/2019
All Author(s) ListMinkwan Ahn, Michael Drake, Hangsoo Kyung, Han Stice
Journal nameReview of Accounting Studies
Volume Number24
Issue Number1
Place of PublicationUnited States
Pages341 - 392
LanguagesEnglish-United States

Last updated on 2022-09-01 at 00:37