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Journal of Accounting and Economics Vol. 47 No. 1-2 2009

Sell-side debt analysts

Rick Johnston1,2; Stanimir Markov3; Sundaresh Ramnath4

1 The Ohio State University · 2 Fisher College · 3 The University of Texas at Dallas · 4 University of Miami

Abstract

We study the determinants and market impact of sell-side debt research. Analyzing a sample of 5920 debt reports published by 15 brokerage firms from 1999 to 2004, we document that companies with a higher probability of financial distress, lower market-to-book ratio, larger debt, and higher leverage receive more debt research. In addition, we document higher frequency of debt reports around credit ratings downgrades and find that their publication impacts equity prices. The evidence enhances our understanding of the nature of the market forces shaping sell-side debt research and its effect on price formation.

DOI
10.1016/j.jacceco.2008.07.001
Volume
47
Issue
1-2
Pages
91-107
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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