Review of Financial Studies Vol. 22 No. 5 2009
Financial Analysts' Performance: Sector Versus Country Specialization
Abstract
Brokerage houses normally structure their research activities along either country or sector lines. I investigate whether organizational structure affects the quality of financial analysts' earnings forecasts. Specifically, I compare the performance of country-specialized financial analysts with that of sector-specialized financial analysts. The former issue forecasts considerably more accurately than the latter. Country specialists benefit from an informational advantage over sector specialists. A superior knowledge of country-specific factors, as well as geographical proximity between analysts and the firms they cover, are significant determinants of this advantage. The Author 2007. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please email: [email protected], Oxford University Press.
- DOI
- 10.1093/rfs/hhm024
- Volume
- 22
- Issue
- 5
- Pages
- 2087-2131
- Language
- en
- Sources
- openalex crossref