Risk disclosure; Analyst following; Information Asymmetry
Abstract :
[en] Prior research shows that financial analysts play an important information intermediary role in France. This study extends earlier research to examine the effect of risk disclosure on the number of analysts following listed firms. Using a unique dataset of French firms on the 120 SBF index over 2007−2015, the results show a positive and significant relation between risk disclosure and analyst following, suggesting that firms having greater risk disclosure attract more financial analysts. These findings provide empirical support to the argument that analysts incur lower costs of information gathering in firms with greater risk disclosure. The demand for analyst services is also more valuable in these firms, given their potentially high exposure to risks, implying greater analyst following. Overall, our results are in line with prior literature highlighting that analysts’ activities complement annual report disclosures and, generally, corporate disclosures.
Disciplines :
Accounting & auditing
Author, co-author :
DEROUICHE, Imen ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
MUESSIG, Anke ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
WEBER, Véronique ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
External co-authors :
no
Language :
English
Title :
Risk disclosure and analyst following: a study of French listed firms
FNR8363110 - The Simultaneous Relation Between Accounting Conservatism And Risk Reporting And Their Joint Effect On Analysts' Forecast Accuracy, 2014 (01/07/2016-30/06/2019) - Anke Müßig
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