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| Author: | Lang, M.H. Lins, K.V. Miller, D.P. |
| Title: | Concentrated control, analyst following, and valuation: Do analysts matter most when investors are protected least? |
| Journal: | Journal of Accounting Research
2004 : JUN, VOL. 42:3, p. 589-623 |
| Index terms: | Finance Stakeholders Valuation Investors Stocks |
| Language: | eng |
| Abstract: | This paper uses a sample of more than 2.500 firms from 27 countries to investigate the relation among ownership structure, analyst following, investor protection, and valuation. It is found that analysts are less likely to follow firms with potential incentives to withhold or manipulate information. In addition, this relation is stronger for firms from low-shareholder-protection countries. A positive valuation effect is found when analysts cover firms that have both potentially poor internal governance and weak country-level external governance. Overall, the findings suggest among others that corporate governance plays an important role in analysts' willingness to follow firms and that increased analyst following is associated with higher valuations. |
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