Analyst career concerns and stock price crash risk
研究美国公司数据发现，有职业担忧的分析师能降低未来股价崩盘风险，其机制是减少信息不对称和公司风险，且在治理弱、分析师覆盖少、工作忙的公司中效果更明显。
This study investigates the impact of analyst career concerns (ACC) on stock price crash risk (SPCR). Utilizing a sizable sample of U.S. firms from 1994 to 2020, we observe that career-concerned analysts help reduce future SPCR. We exploit brokerage house mergers as an exogenous shock to ACC and reveal that the crash mitigating effect of ACC is less noticeable after a decrease in career concerns, implying a causal relationship. Moreover, our main evidence remains robust when using different specifications of the key variables and additional identification strategies to address endogeneity concerns. Our mechanism analysis suggests that career concerns reduce crash risk through reducing information asymmetry and firm risk. Finally, our results appear more salient in firms characterized by weaker corporate governance, lower levels of analyst coverage, and higher analyst workload (i.e., busy analysts). Collectively, our results underscore the incremental role of career-concerned analysts in influencing SPCR. • We examine the impact of analyst career concerns (ACC) on stock price crash risk (SPC). • ACC help reduce future SPC. • ACC reduce future SPC by mitigating information asymmetry and firm risk. • The effect is stronger in firms with weak governance, low analyst coverage, and busy analysts.