Keywords

analyst recommendations, business press, market reactions

Abstract

We investigate the information-dissemination role of the business press by examining the coverage of analyst recommendation revisions. Consistent with the press providing wider dissemination of analyst reports, we find evidence that coverage of analyst recommendation revisions significantly increases the initial market reaction to these revisions and decreases the subsequent price drift. Furthermore, we find that news flash coverage, rather than in-depth coverage, of a recommendation revision drives both the initial market reaction results and drift results. Finally, we show that broader press coverage influences the activities of large-trade institutional investors but not highfrequency traders. Overall, our findings suggest a complementary role between analysts and the business press: increased dissemination of recommendation revisions, rather than information creation on the part of the business press, serves to better inform the market about analyst recommendation revision decisions.

Original Publication Citation

Ahn, M., Drake, M., Kyung, H. et al. The role of the business press in the pricing of analysts’ recommendation revisions. Rev Account Stud 24, 341–392 (2019). https://doi.org/10.1007/s11142-019-9485-3

Document Type

Peer-Reviewed Article

Publication Date

2019

Publisher

Review of Accounting Studies

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Full Professor

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Accounting Commons

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