Gender heterogeneity in the sell-side analyst recommendation issuing process

- We investigate the recommendation issuing process of financial analysts.
- We examine whether gender heterogeneity exists.
- Female analysts are more conservative than male analysts.
- The odds for women to issue optimistic advice is 40% lower than for men.
- Findings cannot be explained by experience, stock characteristics, task complexity.

Using analyst stock recommendations issued between January 1996 and December 2006 we show that the odds for female financial analysts to issue optimistic investment advice is 40% lower than for male analysts. Although 17% of our sample of analysts is female, 48% is employed by a top financial institution and for them the odds to issue optimistic recommendations are 16% lower than their male colleagues. The odds are even 30% lower than their female counterparts at non-top institutions. The observed gender heterogeneity cannot be attributed to differences in the risk characteristics of recommended stocks, experience or task complexity.