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Sell-side analysts' career concerns during banking stresses

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Sell-side analysts' career concerns during banking stresses. / Nolte, Ingmar; Nolte, Sandra; Vasios, Michalis.

In: Journal of Banking and Finance, Vol. 49, 12.2014, p. 424-441.

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Nolte, Ingmar ; Nolte, Sandra ; Vasios, Michalis. / Sell-side analysts' career concerns during banking stresses. In: Journal of Banking and Finance. 2014 ; Vol. 49. pp. 424-441.

Bibtex

@article{ff14f62aae864c7a832882ed81df873e,
title = "Sell-side analysts' career concerns during banking stresses",
abstract = "We propose a new approach to examine sell-side analysts{\textquoteright} career concerns by relating their forecast boldness to their employers{\textquoteright} news flows. Specifically, we use banking sector news to proxy for the severity of career concerns. Analysts follow more closely the consensus forecast when the prospects of the banking sector are negative (and vice versa). The effect is both economically and statistically significant after controlling for various firm, analyst, brokerage house, and forecasting characteristics, as well as sector and economy wide effects. The more established analysts, in terms of reputation and experience, are generally unaffected by banking sector news. In contrast, their less established peers tend to cluster their forecasts near the consensus after a sequence of negative news flows for banks. Collectively, our results support the notion that during banking stresses when job security is low analysts{\textquoteright} tendency to imitate others increases.",
keywords = "Sell-side analysts, News flows , Career concerns , Financial crisis",
author = "Ingmar Nolte and Sandra Nolte and Michalis Vasios",
year = "2014",
month = dec
doi = "10.1016/j.jbankfin.2014.03.010",
language = "English",
volume = "49",
pages = "424--441",
journal = "Journal of Banking and Finance",
issn = "0378-4266",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Sell-side analysts' career concerns during banking stresses

AU - Nolte, Ingmar

AU - Nolte, Sandra

AU - Vasios, Michalis

PY - 2014/12

Y1 - 2014/12

N2 - We propose a new approach to examine sell-side analysts’ career concerns by relating their forecast boldness to their employers’ news flows. Specifically, we use banking sector news to proxy for the severity of career concerns. Analysts follow more closely the consensus forecast when the prospects of the banking sector are negative (and vice versa). The effect is both economically and statistically significant after controlling for various firm, analyst, brokerage house, and forecasting characteristics, as well as sector and economy wide effects. The more established analysts, in terms of reputation and experience, are generally unaffected by banking sector news. In contrast, their less established peers tend to cluster their forecasts near the consensus after a sequence of negative news flows for banks. Collectively, our results support the notion that during banking stresses when job security is low analysts’ tendency to imitate others increases.

AB - We propose a new approach to examine sell-side analysts’ career concerns by relating their forecast boldness to their employers’ news flows. Specifically, we use banking sector news to proxy for the severity of career concerns. Analysts follow more closely the consensus forecast when the prospects of the banking sector are negative (and vice versa). The effect is both economically and statistically significant after controlling for various firm, analyst, brokerage house, and forecasting characteristics, as well as sector and economy wide effects. The more established analysts, in terms of reputation and experience, are generally unaffected by banking sector news. In contrast, their less established peers tend to cluster their forecasts near the consensus after a sequence of negative news flows for banks. Collectively, our results support the notion that during banking stresses when job security is low analysts’ tendency to imitate others increases.

KW - Sell-side analysts

KW - News flows

KW - Career concerns

KW - Financial crisis

U2 - 10.1016/j.jbankfin.2014.03.010

DO - 10.1016/j.jbankfin.2014.03.010

M3 - Journal article

VL - 49

SP - 424

EP - 441

JO - Journal of Banking and Finance

JF - Journal of Banking and Finance

SN - 0378-4266

ER -