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 | |
| State | Published - Mar 1 2009 |
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Keywords
- Analyst
- Credit rating
- Debt
- Financial distress
- Information intermediary
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
Cite this
Sell-side debt analysts. / Johnston, Rick; Markov, Stanimir; Ramnath, Sundaresh.
In: Journal of Accounting and Economics, Vol. 47, No. 1-2, 01.03.2009, p. 91-107.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Sell-side debt analysts
AU - Johnston, Rick
AU - Markov, Stanimir
AU - Ramnath, Sundaresh
PY - 2009/3/1
Y1 - 2009/3/1
N2 - 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.
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.
KW - Analyst
KW - Credit rating
KW - Debt
KW - Financial distress
KW - Information intermediary
UR - http://www.scopus.com/inward/record.url?scp=59749084951&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=59749084951&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2008.07.001
DO - 10.1016/j.jacceco.2008.07.001
M3 - Article
VL - 47
SP - 91
EP - 107
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 1-2
ER -