The informational role of Bond analysts

Journal of Accounting Research

Volumn 47, Issue 5, 2009, Pages 1201-1248

  De Franco, Gus ^a   Vasvari, Florin P ^b   Wittenberg Moerman, Regina ^c  

^a UNIVERSITY OF TORONTO   (Canada)

^b LONDON BUSINESS SCHOOL   (United Kingdom)

^c UNIVERSITY OF CHICAGO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70350001735     PISSN: 00218456     EISSN: 1475679X     Source Type: Journal    
DOI: 10.1111/j.1475-679X.2009.00348.x     Document Type: Article

References (86)

1. Acharya, V., and T. Johnson Insider Trading in Credit Derivatives Journal of Financial Economics 84 (2007 110 141.
2. Alexander, G. J. A. K. Edwards and M. G. Ferri What Does Nasdaq's High-Yield Bond Market Reveal about Bondholder-Stockholder Conflicts? Financial Management 29 (2000a 23 39.
3. Alexander, G. J. A. K. Edwards and M. G. Ferri The Determinants of Trading Volume of High-Yield Corporate Bonds Journal of Financial Markets 3 (2000b 177 204.
4. Ball, R. Infrastructure Requirements for an Economically Efficient System of Public Financial Reporting and Disclosure Brookings-Wharton Papers on Financial Services (2001 69 127.
5. Ball, R. R. Bushman and F. Vasvari The Debt-Contracting Value of Accounting Information and Loan Syndicate Structure Journal of Accounting Research 46 (2008 247 287.
6. Ball, R. A. Robin and G. Sadka Is Financial Reporting Shaped by Equity Markets or by Debt Markets? An International Study of Timeliness and Conservatism Review of Accounting Studies 13 (2008 168 205.
7. Ball, R., and L. Shivakumar Earnings Quality in UK Private Firms: Comparative Loss Recognition Timeliness Journal of Accounting and Economics 39 (2005 83 128.
8. Ball, R., and L. Shivakumar How Much New Information Is There in Earnings? Journal of Accounting Research 46 (2008 975 1016.
9. Barber, B. R. Lehavy M. Mcnichols and B. Trueman Can Investors Profit from the Prophets? Security Analyst Recommendations and Stock Returns? Journal of Finance 56 (2001 531 563. (Pubitemid 33592072)
10. Barber, B. R. Lehavy M. Mcnichols and B. Trueman Buys, Holds, and Sells: The Distribution of Investment Banks' Stocks Ratings and the Implications for the Profitability of Analysts' Recommendations Journal of Accounting and Economics 41 (2006 87 117.
11. Barniv, R. O. K. Hope M. Myring and W. B. Thomas Do Analysts Practice What They Preach and Should Investors Listen? Effects of Recent Regulations The Accounting Review 84 (2009 1015 1039.
12. Beaver, W. Financial Reporting: An Accounting Revolution, Third Edition. Upper Saddle River, NJ : Prentice-Hall, 1998.
13. Beaver, W. R. Lambert and D. Morse The Information Content of Security Prices Journal of Accounting and Economics 2 (1980 3 28.
14. Beaver, W. H. C. Shakespeare and M. T. Soliman Differential Properties in the Ratings of Certified versus Non-Certified Bond-Rating Agencies Journal of Accounting and Economics 42 (2006 303 334.
15. Bessembinder, H., and W. Maxwell Transparency and the Corporate Bond Market Journal of Economic Perspectives 22 (2008 217 234.
16. Bessembinder, H. W. Maxwell and K. Venkataraman Market Transparency, Liquidity Externalities, and Institutional Trading Costs in Corporate Bonds Journal of Financial Economics 82 (2006 251 288.
17. BMA (Bond Market Association). "Guiding Principles to Promote the Integrity of Fixed Income Research: A Global Approach to Managing Potential Conflicts of Interest May 19, 2004. Web site, http://www.sifma.org/research/pdf/ Guiding-Principles-for-Research.pdf.
18. Boni, L., and K. L. Womack Wall Street's Credibility Problem: Misaligned Incentives and Dubious Fixes? Brookings-Wharton Papers on Financial Services (2002 93 130.
19. Bowen, R. A. Davis and D. Matsumoto Do Conference Calls Affect Analysts' Forecasts The Accounting Review 77 (2002 285 316.
20. Campbell, J. Y., and G. B. Taksler Equity Volatility and Corporate Bond Yields Journal of Finance 58 (2003 2321 2349.
21. Chakravarty, S., and A. Sarkar Trading Costs in Three U.S. Bond Markets Journal of Fixed Income 13 (2003 39 48.
22. Clement, M. B. Analyst Forecast Accuracy: Do Ability, Resources and Portfolio Complexity Matter? Journal of Accounting and Economics 27 (1999 285 303.
23. Clement, M. B., and S. Tse Financial Analyst Characteristics and Herding Behavior in Forecasting Journal of Finance 60 (2005 307 341.
24. Collin-Dufresne, P. R. S. Goldstein and J. S. Martin The Determinants of Credit Spread Changes Journal of Finance 56 (2001 2177 2207.
25. Cooper, R. A. T. E. Day and C. M. Lewis Following the Leader: A Study of Individual Analysts' Earnings Forecasts Journal of Financial Economics 61 (2001 383 416.
26. Cready, W., and D. Hurtt Assessing Investor Response to Information Events Using Return and Volume Metrics The Accounting Review 77 (2002 891 909.
27. Currie, A. Watch Out, Financial Engineers Are About Euromoney June (2005 1 4.
28. Das, S. C. Levine and K. Sivaramakrishnan Earnings Predictability and Bias in Analysts' Earnings Forecasts The Accounting Review 73 (1998 277 294.
29. Dechow, P. M. A. P. Hutton and R. G. Sloan The Relation between Analysts' Forecasts of Long-Term Earnings Growth and Stock Price Performance following Equity Offerings Contemporary Accounting Research 17 (2000 1 32.
30. De Franco, G. H. Lu and F. P. Vasvari Wealth Transfer Effects of Analysts' Misleading Behavior Journal of Accounting Research 45 (2007 71 110.
31. De Franco, G., and Y. Zhou The Performance of Analysts with a CFA Designation: The Role of Human-Capital and Signaling Theories The Accounting Review 84 (2009 383 404.
32. Dichev, I., and J. Piotroski The Long-Run Returns Following Bond Rating Changes Journal of Finance 56 (2001 173 203. (Pubitemid 33581656)
33. Easton, P. D. S. J. Monahan and F. P. Vasvari Initial Evidence on the Role of Accounting Earnings in the Bond Market Journal of Accounting Research 47 (2009 721 766.
34. Ederington, L. H., and J. C. Goh Bond Rating Agencies and Stock Analysts: Who Knows What When? Journal of Financial and Quantitative Analysis 33 (1998 569 585.
35. Edwards, A. K. L. E. Harris and M. S. Piwowar Corporate Bond Market Transaction Costs and Transparency Journal of Finance 62 (2007 1421 1451.
36. Francis, J., and D. Philbrick Analysts' Decisions as Products of a Multi-Task Environment Journal of Accounting Research 31 (1993 216 230.
37. Francis, J. K. Schipper and L. Vincent Earnings Announcements and Competing Information Journal of Accounting and Economics 33 (2002 313 342.
38. Francis, J., and L. Soffer The Relative Informativeness of Analysts' Stock Recommendations and Earnings Forecast Revisions Journal of Accounting Research 35 (1997 193 211. (Pubitemid 127349163)
39. Frankel, R. M. Johnson and D. Skinner An Empirical Examination of Conference Calls as a Voluntary Disclosure Medium Journal of Accounting Research 37 (1999 133 150.
40. Frankel, R. S. Kothari and J. Weber Determinants of the Informativeness of Analyst Research Journal of Accounting and Economics 41 (2006 29 54.
41. Goh, J. C., and L. H. Ederington Is a Bond Rating Downgrade Bad News, Good News, or No News for Stock Holders? Journal of Finance 48 (1993 2001 2008.
42. Goldstein, M. A. E. S. Hotchkiss and E. R. Sirri Transparency and Liquidity: A Controlled Experiment on Corporate Bonds Review of Financial Studies 20 (2007 235 273.
43. Goodhart, C., and M. O'Hara High Frequency Data in Financial Markets: Issues and Applications Journal of Empirical Finance 4 (1997 73 114.
44. Hand, J. R. Holthausen and R. Leftwich The Effect of Bond Rating Agency Announcements on Bond and Stock Prices Journal of Finance 47 (1992 733 752.
45. Harris, L., and M. Piwowar Secondary Trading Costs in the Municipal Bond Market Journal of Finance 61 (2006 1361 1397.
46. Harris, M., and A. Raviv Differences in Opinion Make a Horse Race Review of Financial Studies 6 (1993 473 494.
47. Hite, G., and A. Warga The Effect of Bond-Rating Changes on Bond Price Performance Financial Analysts Journal 53 (1997 35 51.
48. Holthausen, R., and R. Leftwich The Effect of Bond Rating Changes on Common Stock Prices Journal of Financial Economics 17 (1986 57 89.
49. Hong, G., and A. Warga An Empirical Study of Bond Market Transactions Financial Analysts Journal 56 (2000 32 46.
50. Hotchkiss, E. S., and T. Ronen The Informational Efficiency of the Corporate Bond Market: An Intraday Analysis Review of Financial Studies 15 (2002 1325 1354.
51. Hull, J. M. Predescu and A. White The Relationship between Credit Default Swap Spreads, Bond Yields, and Credit Rating Announcements Journal of Banking and Finance 28 (2004 2789 2811.
52. Institutional Investor The 2004 All-America Fixed-Income Research Team September 14, 2004).
53. Irvine, P. J. Analysts' Forecasts and Brokerage-Firm Trading The Accounting Review 79 (2004 125 149.
54. Ivkovic, Z., and N. Jegadeesh The Timing and Value of Forecast and Recommendation Revisions Journal of Financial Economics 73 (2004 433 463.
55. Jennings, R. Unsystematic Security Price Movements, Management Earnings Forecasts, and Revisions in Consensus Analyst Earnings Forecasts Journal of Accounting Research 25 (1987 90 110.
56. Johnston, R. S. Markov and S. Ramnath Sell-Side Debt Analysts Journal of Accounting and Economics 47 (2009 91 107.
57. Jorion, P. Z. Liu and C. Shi Informational Effects of Regulation FD: Evidence from Rating Agencies Journal of Financial Economics 76 (2005 309 330.
58. Kadan, O. L. Madureira R. Wang and T. Zach Conflicts of Interest and Stock Recommendations - The Effects of the Global Settlement and Recent Regulations Review of Financial Studies (2008 Forthcoming.
59. Karpoff, J. M. The Relation between Price Changes and Trading Volume: A Survey Journal of Financial and Quantitative Analysis 22 (1987 109 126.
60. Kim, O., and R. E. Verrecchia Trading Volume and Price Reactions to Public Announcements Journal of Accounting Research 29 (1991 302 321.
61. Kim, O., and R. E. Verrecchia Market Liquidity and Volume around Earnings Announcements Journal of Accounting and Economics 17 (1994 41 67.
62. Kolasinski, A., and S. P. Kothari Investment Banking and Analyst Objectivity: Evidence from Analysts Affiliated with M&A Advisors Journal of Financial and Quantitative Analysis 43 (2008 817 842.
63. Lang, M. H., and R. J. Lundholm Corporate Disclosure Policy and Analyst Behavior The Accounting Review 71 (1996 467 492.
64. Lee, P. Credit Analysts Get Back to Fundamentals Euromoney (April, 2002 72.
65. Lim, T. Rationality and Analysts' Forecast Bias Journal of Finance 56 (2001 369 385. (Pubitemid 33581663)
66. Lin, H.-W., and M. F. Mcnichols Underwriting Relationships, Analyst Earnings Forecasts and Investment Recommendations Journal of Accounting and Economics 25 (1998 101 127.
67. Ljungqvist, A. F. Marston L. T. Starks K. D. Wei and H. Yan Conflicts of Interest in Sell-Side Research and the Moderating Role of Institutional Investors Journal of Financial Economics 85 (2007 420 456.
68. Lucchetti, A., and S. Craig Bond Research Facing Probes over Conflicts The Wall Street Journal (April 5, 2004 C1.
69. Lys, T., and S. Sohn The Association between Revisions of Financial Analysts' Earnings Forecasts and Security-Price Changes Journal of Accounting and Economics 13 (1990 341 363.
70. Malmendier, U., and D. Shanthikumar Are Small Investors Naive about Incentives? Journal of Financial Economics 85 (2007 457 489.
71. Michaely, R., and K. Womack Conflict of Interest and the Credibility of Underwriter Analyst Recommendations The Review of Financial Studies 12 (1999 653 686.
72. O'Brien, P. C. M. F. Mcnichols and H. W. Lin. "Analyst Impartiality and Investment Banking Relationships Journal of Accounting Research 43 (2005 623 650.
73. Parrino, R., and M. Weisbach Measuring Investment Distortions Arising from Stockholder-Bondholder Conflicts Journal of Financial Economics 53 (1999 3 42.
74. Pinches, G., and J. Singleton The Adjustment of Stock Prices to Bond Rating Changes Journal of Finance 33 (1978 29 44.
75. Ronan, G. The 2006 All-America Fixed-Income Research Team Institutional Investor (September, 2006 88 96.
76. Sarig, O., and A. Warga Bond Price Data and Bond Market Liquidity Journal of Financial and Quantitative Analysis 24 (1989 367 378.
77. U.S. Securities and Exchange Commission (SEC). Written testimony concerning conflicts of interest faced by brokerage firms and their research analysts, by L.S. Unger, before the Committee on Financial Services, July 31, 2001. Web site, http://www.sec.gov/news/testimony/073101tslu.htm.
78. U.S. Securities and Exchange Commission (SEC). Ten of nation's top investment firms settle enforcement actions involving conflicts of interest between research and investment banking. News release, April 28, 2003. SEC, 2003a. Web site, http://www.sec.gov/news/press/2003-54.htm.
79. U.S. Securities and Exchange Commission (SEC). "SEC Fact Sheet on Global Analyst Research Settlements April 28, 2003. Web site, http://www.sec.gov/news/speech/factsheet.htm. SEC 2003b.
80. U.S. Securities and Exchange Commission (SEC). Remarks before the Bond Market Association, by SEC Chairman William H. Donaldson, April 20, 2005. Web site, http://www.sec.gov/news/speech/spch042005whd.htm.
81. Smith, R. S. Craig and D. Solomon Wall Street Firms to Pay $1.4 Bn. to End Inquiry - Record Payment Settles Conflict-of-Interest Charges The Wall Street Journal (April 29, 2003).
82. Stickel, S. The Timing of and Incentives for Annual Earnings Forecasts Near Interim Earnings Announcements Journal of Accounting and Economics 11 (1989 275 292.
83. Stickel, S. E. The Anatomy of the Performance of Buy and Sell Recommendations Financial Analysts Journal 51 (1995 25 39.
84. Tasker, S. Bridging the Information Gap: Quarterly Conference Calls as a Medium for Voluntary Disclosure Review of Accounting Studies 3 (1998 137 167.
85. Watts, R. L. Conservatism in Accounting Part I: Explanations and Implications Accounting Horizons 3 (2003 207 221.
86. Womack, K. Do Brokerage Analysts' Recommendations Have Investment Value? Journal of Finance 51 (1996 137 167. (Pubitemid 126314157)