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- Title
Does Industry Competition Influence Analyst Coverage Decisions and Career Outcomes?
- Authors
Hsu, Charles; Li, Xi; Ma, Zhiming; Phillips, Gordon M.
- Abstract
We analyze whether industry competition influences analyst coverage decisions and whether analysts benefit from covering product market competitors. We find that analysts are more likely to cover a firm when this firm competes with more firms already covered by the analyst. We also find that the intensity of competition among these competitors is additionally important to the coverage decision. Moreover, we find that analysts who cover product market competitors are more likely to obtain analyst star status. These results are consistent with the importance to analysts of industry competition and product market knowledge accumulated through covering product market competitors.
- Subjects
ECONOMIC competition; BUSINESS analysts; DECISION making; COMMERCIAL products; INDUSTRIES; INVESTORS; INTERNATIONAL Business Machines Corp.; APPLE Inc.
- Publication
Journal of Financial & Quantitative Analysis, 2023, Vol 58, Issue 2, p711
- ISSN
0022-1090
- Publication type
Article
- DOI
10.1017/S0022109022000424