The Real Effects of Financial Shocks : Evidence from Exogenous Changes in Analyst Coverage

@inproceedings{Derrien2012TheRE,
  title={The Real Effects of Financial Shocks : Evidence from Exogenous Changes in Analyst Coverage},
  author={François Derrien and Ambrus Kecsk{\'e}s},
  year={2012}
}
We study the causal effects of analyst coverage on corporate investment and financing policies. We hypothesize that a decrease in analyst coverage increases information asymmetry and thus increases the cost of capital; as a result, firms decrease their investment and financing. We use broker closures and broker mergers to identify changes in analyst… CONTINUE READING