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- Title
Does shareholder protection affect the performance of analysts as a gatekeeper?
- Authors
Koch, Christopher; Nilsson, Ola; Eriksson, Katarina
- Abstract
This paper investigates the effect of shareholder protection on analysts' performance. The important corporate governance role analysts can play by monitoring management has largely been ignored in the literature. Using a newly constructed index, we are for the first time able to analyse how changes in shareholder protection over time affect analysts' performance as a gatekeeper. We find that strengthened shareholder protection improves analysts' performance as a gatekeeper, i.e. analysts' ability to reduce information asymmetry improves with strengthened shareholder protection. However, we also find a substitution effect: Strengthened shareholder protection makes analysts' services less valuable to investors, thereby leading to a reduction in the number of analysts following firms.
- Subjects
STOCKHOLDERS; GATEKEEPERS; PERFORMANCE evaluation; CORPORATE governance; INFORMATION theory; FINANCIAL risk
- Publication
Journal of Management & Governance, 2014, Vol 18, Issue 2, p315
- ISSN
1385-3457
- Publication type
Article
- DOI
10.1007/s10997-012-9227-4