Do Financial Analysts Restrain Insiders’ Informational Advantage?
研究发现分析师覆盖终止会降低股票流动性和价格效率，增加知情交易，并提高内部人交易的盈利性，机构投资者能缓解但无法消除这些负面效应。
By collecting and disseminating price-sensitive information, financial analysts should reduce firm insiders’ informational advantage with a consequent impact on trading dynamics and market quality. We empirically examine the impact of complete analysts’ coverage termination on stocks’ liquidity, price discovery, and insider trading profitability. Termination leads to deteriorating liquidity and price efficiency, more informed trading, and higher profitability of insider trades. The magnitude of these effects depends on the strength of insiders’ ownership and on management’s decision whether to improve the firm’s information environment after coverage termination. Institutional investors alleviate, but do not eliminate, the negative effects of termination.