Buy-Side Analysts, Sell-Side Analysts, and Investment Decisions of Money Managers

  title={Buy-Side Analysts, Sell-Side Analysts, and Investment Decisions of Money Managers},
  author={Yingmei Cheng and Mark H. Liu and Jun Qian},
  journal={Journal of Financial and Quantitative Analysis},
  pages={51 - 83}
Abstract We examine the role of financial analysts in forming institutional investors' investment decisions. In our model, a fund manager invests in a stock based on the optimal weighting of reports created by a biased sell-side analyst and an unbiased buy-side analyst. The manager puts a higher weight on the buy-side analyst's report when the quality of the buyside analyst's information relative to that of the sell-side analyst increases, or when the sell-side analyst's degree of bias or… 

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