Corporate culture and analyst catering

Pacelli, Joseph

doi:10.1016/j.jacceco.2018.08.017

Cited by 77 publications

(27 citation statements)

References 55 publications

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“…We also note that the frequency of an audit by FINRA is a function of the broker's size and business model(Pacelli 2019). The discovery of misconduct may be more likely at larger, more complex brokerages that are subject to a more frequent audit.…”

mentioning

confidence: 87%

“…Two other studies, Brown, Hugon, and Lu (2010) and Pacelli (2019), rely on data obtained from FINRA (or its predecessor, NASD). Brown et al (2010) examine background disclosures about individual analysts provided by the NASD and examine the association between these disclosures and properties of analysts' earnings forecasts.…”

Section: Prior Researchmentioning

confidence: 99%

“…Pacelli (2019) relies on FINRA data to investigate whether analyst forecast quality is lower among analysts employed by brokerages with a weak compliance culture and identifies brokerages as having a weak compliance culture if they have been accused by FINRA of violations in their non-research divisions. Pacelli (2019) documents lower forecast quality for analysts employed at institutions with securities violations in non-research activities, suggesting that a culture of misconduct in one department can permeate the organization. Our study is unique in that we examine (a) sanctions related directly to sell-side analysts and their research, and (b) changes in analyst behavior following FINRA sanctions.…”

Section: Prior Researchmentioning

confidence: 99%

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Changes in analysts’ stock recommendations following regulatory action against their brokerage

2019

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Despite the importance of sell-side analysts in the capital markets, we know little about the effectiveness of routine monitoring of the sell-side industry. We examine the attributes of sell-side research issued by analysts before and after their brokerage is subject to regulatory sanctions. We find that after a regulatory action, analysts at sanctioned brokerages lower their stock recommendations, both in absolute terms and relative to the recommendations of other analysts following the same firms. Following a regulatory action, analysts at sanctioned brokerages are also more likely than analysts at other brokerages to downgrade a company's stock after the receipt of unfavorable information about the firm. Importantly, we document that analysts at non-sanctioned brokerages also reduce the optimism in their stock recommendations when a peer analyst's brokerage is sanctioned, consistent with regulatory spillovers as a result of routine regulatory monitoring. Our study provides empirical evidence that regulatory action against sell-side brokerages is associated with a reduction in sell-side analysts' positive bias at both sanctioned and non-sanctioned brokerages.

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mentioning

confidence: 87%

Section: Prior Researchmentioning

confidence: 99%

Section: Prior Researchmentioning

confidence: 99%

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Changes in analysts’ stock recommendations following regulatory action against their brokerage

2019

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“…A recent study shows that the corporate culture of different financial institutions varies greatly and has a direct impact on service quality and performance. The cultural difference of securities companies should be especially great among institutions from different countries that share an intrinsic cultural gap, which could therefore cause culture conflict among IJVS with institutional shareholders from different cultural backgrounds [10].…”

Section: Introductionmentioning

confidence: 99%

The Influence of Risk Culture on the Performance of International Joint-Venture Securities

Tang

Wang

et al. 2020

Sustainability

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With the development of economic globalization, culture is a key factor supporting the sustainability of foreign direct investment (FDI), especially for multinational enterprises. This paper takes the Chinese capital market as a sample and, combined with interviews with managers of international joint-venture securities (IJVS), finds that the culture of participants formed in developed and emerging capital market has a significant impact on the performance of IJVS. Using the degree of price fluctuation to measure the risk culture of each capital market, this paper observes that the risk culture in the Chinese capital market is significantly stronger than that of developed countries. This paper also finds that the stronger the risk culture IJVS shareholders have, the better they can adapt to the environment of the Chinese capital market and the better the performance they can achieve. Furthermore, risk culture distance, calculated by the risk culture differences between foreign shareholders and Chinese capital market, are significantly negatively correlated with IJVS performance and efficiency.

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“…offer a comprehensive survey of textual analysis in accounting and finance. Relatedly,Pacelli (2019) uses Glassdoor data to validate his finding that employee opinions contain valuable information.…”

mentioning

confidence: 99%

Me Too: Does Workplace Sexual Harassment Hurt Firm Value?

Au¹

2020

Preprint

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We investigate the impact of workplace sexual harassment on firm value by estimating the incidence of sexual harassment (SH) through textual analysis of online job reviews. During 2011-2017, the value-weighted portfolio of firms in the top quantiles (top 1% to 5%) of the SH score earned a five-factor annualized alpha ranging from-8.4% to-21.2%, representing an annual shareholder value loss of $0.9 to $2.2 billion per harassment-prone firm. High SH scores are also associated with sharp declines in operating profitability and increases in labor costs. These results indicate that sexual harassment has a highly detrimental effect on firm value.

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Corporate culture and analyst catering

Cited by 77 publications

References 55 publications

Changes in analysts’ stock recommendations following regulatory action against their brokerage

Changes in analysts’ stock recommendations following regulatory action against their brokerage

The Influence of Risk Culture on the Performance of International Joint-Venture Securities

Me Too: Does Workplace Sexual Harassment Hurt Firm Value?

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