Sell-side debt analysts

Rick Johnston; Stanimir Markov; Sundaresh Ramnath

doi:10.1016/j.jacceco.2008.07.001

Sell-side debt analysts

Rick Johnston, Stanimir Markov, Sundaresh Ramnath

Accounting

Research output: Contribution to journal › Article › peer-review

33 Scopus citations

Abstract

We study the determinants and market impact of sell-side debt research. Analyzing a sample of 5920 debt reports published by 15 brokerage firms from 1999 to 2004, we document that companies with a higher probability of financial distress, lower market-to-book ratio, larger debt, and higher leverage receive more debt research. In addition, we document higher frequency of debt reports around credit ratings downgrades and find that their publication impacts equity prices. The evidence enhances our understanding of the nature of the market forces shaping sell-side debt research and its effect on price formation.

Original language	English (US)
Pages (from-to)	91-107
Number of pages	17
Journal	Journal of Accounting and Economics
Volume	47
Issue number	1-2
DOIs	https://doi.org/10.1016/j.jacceco.2008.07.001
State	Published - Mar 1 2009

Keywords

Analyst
Credit rating
Debt
Financial distress
Information intermediary

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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10.1016/j.jacceco.2008.07.001

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AB - We study the determinants and market impact of sell-side debt research. Analyzing a sample of 5920 debt reports published by 15 brokerage firms from 1999 to 2004, we document that companies with a higher probability of financial distress, lower market-to-book ratio, larger debt, and higher leverage receive more debt research. In addition, we document higher frequency of debt reports around credit ratings downgrades and find that their publication impacts equity prices. The evidence enhances our understanding of the nature of the market forces shaping sell-side debt research and its effect on price formation.

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KW - Credit rating

KW - Debt

KW - Financial distress

KW - Information intermediary

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Sell-side debt analysts

Abstract

Keywords

ASJC Scopus subject areas

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