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

Material TypeArticleLanguageEnglish
TitleThe Real Effects of Financial Shocks: Evidence from Exogenous Changes in Analyst Coverage Author(S)FRANاOIS DERRIEN (Author)
Abstract  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 coverage that are exogenous to corporate policies. ...Paginationp 1407-1440
SubjectEconomicsDescriptorsFinance
Journal TitleThe Journal of Finance  
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