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Do brokerage houses add value? The market impact of UK sell-side analyst recommendation changes

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  • Ryan, Paul
  • Taffler, Richard J.

Abstract

This paper reports on the first full study investigating the economic role of sell-side analysts’ stock recommendations in the UK market. We also explore whether UK analysts are, in practice, influenced by the same biases as that reported for their US counterparts.

Suggested Citation

  • Ryan, Paul & Taffler, Richard J., 2006. "Do brokerage houses add value? The market impact of UK sell-side analyst recommendation changes," The British Accounting Review, Elsevier, vol. 38(4), pages 371-386.
    • Handle: RePEc:eee:bracre:v:38:y:2006:i:4:p:371-386
    DOI: 10.1016/j.bar.2006.07.015
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    Cited by:

    1. David H. Zhu & James D. Westphal, 2011. "Misperceiving the Beliefs of Others: How Pluralistic Ignorance Contributes to the Persistence of Positive Security Analyst Reactions to the Adoption of Stock Repurchase Plans," Organization Science, INFORMS, vol. 22(4), pages 869-886, August.
    2. Jiang, George J. & Lu, Liangliang & Zhu, Dongming, 2014. "The information content of analyst recommendation revisions — Evidence from the Chinese stock market," Pacific-Basin Finance Journal, Elsevier, vol. 29(C), pages 1-17.
    3. Osman Yukselturk & Jon Tucker, 2015. "The impact of analyst sentiment on UK stock recommendations and target prices," Accounting and Business Research, Taylor & Francis Journals, vol. 45(6-7), pages 869-904, December.
    4. Chen Su & Hanxiong Zhang & Nathan Lael Joseph, 2022. "The performance of UK stock recommendation revisions: Does brokerage house reputation matter?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3051-3070, July.
    5. Thabang Mokoaleli-Mokoteli & Richard J. Taffler & Vineet Agarwal, 2009. "Behavioural Bias and Conflicts of Interest in Analyst Stock Recommendations," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3-4), pages 384-418.
    6. Jeremy Burke & Angela A. Hung & Jack Clift & Steven Garber & Joanne K. Yoong, 2015. "Impacts of Conflicts of Interest in the Financial Services Industry," Working Papers WR-1076, RAND Corporation.
    7. Mei-Chen Lin & Po-Hsin Ho & Hsiang-Lin Chih, 2019. "Effects of managerial overconfidence on analyst recommendations," Review of Quantitative Finance and Accounting, Springer, vol. 53(1), pages 73-99, July.
    8. Chen Su & Hanxiong Zhang & Kenbata Bangassa & Nathan Lael Joseph, 2019. "On the investment value of sell-side analyst recommendation revisions in the UK," Review of Quantitative Finance and Accounting, Springer, vol. 53(1), pages 257-293, July.
    9. Samie Ahmed Sayed, 2015. "Should Analysts Go by the Book? Valuation Models and Target Price Accuracy in an Emerging Market," Global Business Review, International Management Institute, vol. 16(5), pages 832-844, October.
    10. Jonnergård, Karin & von Koch, Christopher & Nilsson, Ola, 2020. "Information environment – An exploration and clarification of the concept based on prior literature," Advances in accounting, Elsevier, vol. 50(C).
    11. Ruben M.T. Peixinho & Richard J. Taffler, 2011. "Are analysts misleading investors? The case of goingconcern opinions," CEFAGE-UE Working Papers 2011_22, University of Evora, CEFAGE-UE (Portugal).
    12. Wnuczak Paweł, 2021. "Profitability of investment strategies developed on the basis of buy and sell recommendations," Journal of Economics and Management, Sciendo, vol. 43(1), pages 317-338, May.
    13. Taufiq Choudhry & Gishan Dissanaike & Ranadeva Jayasekera & Woo-Young Kang & Matthias Nnadi, 2021. "Loss sensitive investors and positively biased analysts in Hong Kong stock market," Review of Quantitative Finance and Accounting, Springer, vol. 57(4), pages 1345-1371, November.
    14. Thabang Mokoaleli‐Mokoteli & Richard J. Taffler & Vineet Agarwal, 2009. "Behavioural Bias and Conflicts of Interest in Analyst Stock Recommendations," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3‐4), pages 384-418, April.

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