Alternative Title

Do equity analysts learn from their colleagues?

Publication Type

Journal Article

Version

publishedVersion

Publication Date

3-2023

Abstract

We study the importance of peer effects among sell-side analysts who work at the same brokerage house, but cover different firms. By mapping the information network within each brokerage, we identify analysts who occupy central positions in their network. Central analysts incorporate more information from their coworkers and produce better research. Using shocks to network structures around brokerage mergers, we identify the influence of peer effects and the importance of industry expertise on analysts’ performance. A portfolio strategy that exploits the forecast revisions of central analysts earns up to 24% per annum.

Keywords

Peer Effects, Analysts, Limited Attention, Networks

Discipline

Finance and Financial Management | Portfolio and Security Analysis

Research Areas

Finance

Publication

Journal of Financial and Quantitative Analysis

Volume

58

Issue

2

First Page

647

Last Page

676

ISSN

0022-1090

Identifier

10.1017/S0022109022000710

Publisher

Cambridge University Press

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Additional URL

https://doi.org/10.1017/S0022109022000710

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