2026-09-18T18:15:12Zhttps://ecommons.cornell.edu/server/oai/requestoai:ecommons.cornell.edu:1813/1097542026-05-15T19:45:42Zcom_1813_35col_1813_47
Kang, Charles Chao
Yeung, Ping Eric
Ng, David T.
Zuo, Luo
2021-09-09T17:40:48Z
2023-06-09T06:00:31Z
2021-05
ProQuest Submission ID: 12477
ProQuest Publication ID: 28490743
https://hdl.handle.net/1813/109754
https://doi.org/10.7298/9167-gk59
15049391
90 pages
In this dissertation, I examine how analysts’ private connections to external peers across brokerages affect the quality of their research. I find that analysts with private connections (i.e., who are connected to external peers via past employment ties and covering the same firm) issue more accurate earnings forecasts than “unconnected” analysts. In addition, the effect of private connections on earnings forecast accuracy is more notable for analyst pairs who are, on average, employed by smaller brokerages, and who are, on average, less skilled, less experienced, and more resource constrained, thereby suggesting that private connections help to mitigate resource constraints and allow less skilled and less experienced analysts to improve their research through generating synergy. Importantly, the market underreacts to forecasts of privately connected analysts, leading to significant stock price drifts following forecast revisions. Using coverage terminations of connected peers as exogenous shocks to private connections, I find decreases in analyst forecast accuracy of the recipient analyst following coverage terminations of mutually covered stocks by connected peers due to permanent employment terminations of connected peers, brokerage terminations of the connected peers’ industry sector, and connected peers’ brokerage closures.
en
Brokerage Resources
External Peers
Financial Analyst
Private Connections
Analysts' Private Connections
dissertation or thesis
https://newcatalog.library.cornell.edu/catalog/15049391
application/pdf
Management
Cornell University
Doctor of Philosophy
Ph. D., Management
https://hdl.handle.net/1813/59810
Publication
Cornell Theses and Dissertations
Kang, Charles Chao
5893a6ea-7af3-41d7-abc6-04bcd26ab5df
open.access
open.access
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<Abstract>In this dissertation, I examine how analysts’ private connections to external peers across brokerages affect the quality of their research. I find that analysts with private connections (i.e., who are connected to external peers via past employment ties and covering the same firm) issue more accurate earnings forecasts than “unconnected” analysts. In addition, the effect of private connections on earnings forecast accuracy is more notable for analyst pairs who are, on average, employed by smaller brokerages, and who are, on average, less skilled, less experienced, and more resource constrained, thereby suggesting that private connections help to mitigate resource constraints and allow less skilled and less experienced analysts to improve their research through generating synergy. Importantly, the market underreacts to forecasts of privately connected analysts, leading to significant stock price drifts following forecast revisions. Using coverage terminations of connected peers as exogenous shocks to private connections, I find decreases in analyst forecast accuracy of the recipient analyst following coverage terminations of mutually covered stocks by connected peers due to permanent employment terminations of connected peers, brokerage terminations of the connected peers’ industry sector, and connected peers’ brokerage closures.</Abstract>
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