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Managerial Ownership and Financial Analysts’ Information Environment
Author(s) -
Han Sam,
Jin Justin Yiqiang,
Kang Tony,
Lobo Gerald
Publication year - 2014
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/jbfa.12070
Subject(s) - intermediary , equity (law) , business , private information retrieval , public information , financial intermediary , equity capital , information asymmetry , financial market , finance , capital market , accounting , economics , public relations , statistics , political science , law , mathematics
Despite the importance of sell‐side financial analysts as information intermediaries in the capital market, little is known about how managerial equity ownership is associated with their information environment. Using Barron, Kim, Lim and Stevens’ (1998) framework for measuring the precision of financial analysts’ information, we observe that managerial ownership is positively associated with the precision of financial analysts’ public (common) and private (idiosyncratic) information, largely consistent with the alignment view of managerial equity ownership. These results are robust to controlling for various economic and statistical factors that might affect the inference.