Security analyst networks, performance and career outcomes
Horton, Joanne; Serafeim, George
Date: 2010
Article
Journal
Journal of Finance
Publisher
Wiley-Blackwell
Abstract
Using a sample of 42,376 board directors and 10,508 security analysts we construct a social
network, mapping the connections between analysts and directors, between directors, and
between analysts. We use social capital theory and techniques developed in social network
analysis to measure the analyst’s level of connectedness and ...
Using a sample of 42,376 board directors and 10,508 security analysts we construct a social
network, mapping the connections between analysts and directors, between directors, and
between analysts. We use social capital theory and techniques developed in social network
analysis to measure the analyst’s level of connectedness and investigate whether these
connections provide any information advantage to the analyst. We find that better-connected
(better-networked) analysts make more accurate, timely, and bold forecasts. Moreover, analysts
with better network positions are less likely to lose their job, suggesting that these analysts are
more valuable to their brokerage houses. We do not find evidence that analyst innate forecasting
ability predicts an analyst’s future network position. In contrast, past forecast optimism has a
positive association with building a better network of connections.
Finance and Accounting
Faculty of Environment, Science and Economy
Item views 0
Full item downloads 0