Essays on Sell-Side Financial Analysts

Wu, Xiaoyong and Goncharov, Igor (2023) Essays on Sell-Side Financial Analysts. PhD thesis, Lancaster University.

Text (2023XiaoyongWuPhD)
2023XiaoyongWuPhD.pdf - Published Version
Download (1MB)

Abstract

Sell-side financial analysts play a crucial role as information intermediaries. On the one hand, by collecting, evaluating and disseminating value-relevant information, the analyst can influence the external information environment. On the other hand, the forecast performance of the analyst is affected by other important factors. This thesis focuses on the interaction between the central bank, the analyst and the external information environment. It includes three self-contained studies. Chapters 2 and 3 of this thesis explore the interplay between central bank monetary policy and analysts. Specifically, Chapter 2 examines the impact of the central bank’s monetary policy surprises on analysts’ earnings forecasts. Chapter 3 investigates how analysts interpret the private information embedded in the central bank’s monetary policy surprises and incorporate it into their earnings forecasts. Chapter 4 focuses on the role of the analyst in transmitting information across firms and further influencing firms’ investment decisions. This chapter explores how this process is affected by analysts’ research portfolios. Overall, this thesis contributes to the accounting, finance and macroeconomic literature by extending the understanding of financial analysts from different perspectives.