Review of Financial Studies Vol. 36 No. 8 2023
Do Corporate Disclosures Constrain Strategic Analyst Behavior?
Abstract
We show that analyst behavior changes in response to a randomly assigned shock that exogenously varies the timeliness and cost of accessing mandatory disclosures in the cross-section of investors: analysts reduce coverage and issue less optimistic, more accurate, less bold, and less informative forecasts. Our evidence indicates that analysts reduce a strategic component of their behavior: the changes are stronger among analysts with more strategic incentives like affiliated or retail-focused analysts. We conclude that mandatory disclosure can substitute for analyst information production, which is constrained by investors’ ability to verify forecasts using corporate filings.
- DOI
- 10.1093/rfs/hhad008
- Volume
- 36
- Issue
- 8
- Pages
- 3163-3212
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref