Evidence that Analyst Following and Institutional Ownership Accelerate the Pricing of Future Earnings

Evidence that Analyst Following and Institutional Ownership Accelerate the Pricing of Future... This paper presents evidence that prices of firms followed by sell-side analysts and favored by institutional investors incorporate future earnings earlier than prices of other firms. We conduct two sets of empirical tests: the first examines coefficients from regressions of returns on lead, contemporaneous, and lag earnings changes; the second compares the timing of monthly abnormal returns from earnings-based zero-investment portfolios. In both sets of tests, the results for analysts and institutions are incremental to each other. In addition, neither the analyst price lead nor the institutional price lead is due to price leads increasing with firm size. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Accounting Studies Springer Journals

Evidence that Analyst Following and Institutional Ownership Accelerate the Pricing of Future Earnings

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Business and Management; Accounting/Auditing; Corporate Finance; Public Finance
ISSN
1380-6653
eISSN
1573-7136
D.O.I.
10.1023/A:1022647822683
Publisher site
See Article on Publisher Site

References

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