The Role of Stock Indices in Analyst Career Outcomes and Stock Recommendations
Journal
SSRN Electronic Journal
ISSN
1556-5068
Type
working paper
Date Issued
2021-01-19
Author(s)
Abstract
Random changes in firms' stock index membership have important implications on sell-side analysts' career outcomes. Covered firms moving from the bottom of Russell 1000 to the top of Russell 2000 significantly increase an analyst's likelihood of moving to a high-status broker or receiving a career-first All-Star Analyst nomination - particularly for early-career analysts. This is reflected in analyst recommendations. For firms that are just above the index threshold - that might move to Russell 2000 if their share price decreases slightly - analyst recommendations are significantly more negative around the time of defining the index weights that determine index membership.
Language
English
Publisher
Elsevier BV
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Name
the role of stock market indices.pdf
Size
452.17 KB
Format
Adobe PDF
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