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Do Analysts Cater to Investor Information Demand?

Author

Listed:
  • Miran Hossain
  • Benjamin A. Jansen
  • Jon Taylor

Abstract

We extend analyst following literature by investigating whether analysts cater coverage towards investor information demand. Results suggest analyst following increases during the months in which a firm’s stock ticker experiences abnormal information demand from investors, while the association is marginally negative in the following month. However, the magnitude of the contemporaneous positive association is greater than the magnitude of the proceeding negative association. This implies that analysts respond to information demand shocks, but partially revert their coverage after the abnormal information demand subsides. Furthermore, our results suggest that analysts cater their coverage more towards institutional investors, relative to retail investors.

Suggested Citation

  • Miran Hossain & Benjamin A. Jansen & Jon Taylor, 2020. "Do Analysts Cater to Investor Information Demand?," Working Papers 202003, Middle Tennessee State University, Department of Economics and Finance.
    • Handle: RePEc:mts:wpaper:202003
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    References listed on IDEAS

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    More about this item

    Keywords

    Analyst Coverage; Information Demand; Institutional Investor; Retail Investor;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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