Are more analysts better? The case of convertible bond announcement effects
研究欧洲公司发行可转换债券的股市反应，发现分析师覆盖越多，负面异常回报越小，且MiFID实施后这一效应更强。
We examine the stock market effects of the announcement and issuance of convertible bonds by European companies, conditional on the extent to which the issuers are covered by equity analysts. While there is no significant market reaction to the issue itself, its first announcement is associated with significant negative abnormal returns. However, we find that abnormal returns are less negative for firms with higher equity analyst following, which suggests that the analysts' monitoring activities improve the information environment surrounding the convertible bond issues. Moreover, this effect is significantly stronger after the implementation date of the European Markets in Financial Instruments Directive (MiFID) in the issuer's home country, indicating a further improvement in the information environment after the regulation came into effect. • We find negative announcement effects of convertible bond issues, especially for issuers facing high financing costs. • The issuance of convertible bonds by EU firms is not associated with significant abnormal returns. • Higher analyst coverage has a mitigating effect on cumulative abnormal announcement returns. • Our results suggest an improvement in the information content of analysts' forecasts after the implementation of MiFID.