The Accounting Review Vol. 98 No. 7 2023
The Field of Investment Advice: The Social Forces That Govern Equity Analysts
Abstract
Literature on equity analysts presents a conundrum: analysts are seen as influential market participants, yet researchers widely criticize them for their bias and inaccuracy. Studies drawing from economic frames struggle to explain this. Therefore, we develop a new conceptualization that positions analysts as actors operating in a social field. Drawing on a qualitative study involving 70 interviews with analysts and portfolio managers, we offer two broad insights. First, we identify long-term interpersonal and interinstitutional ties between buy-side and sell-side actors which contribute to social inertia in the field. Second, we illustrate how sell-side analysts’ social environment is dichotomous, pushing some to converge with consensus estimates, while encouraging others to diverge. Taken as a whole, our findings contribute to the accounting literature by enriching our understanding of the social and institutional forces that govern analyst behavior.
- DOI
- 10.2308/tar-2021-0140
- Volume
- 98
- Issue
- 7
- Pages
- 457-477
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref