Financial analysts' reports: an extended institutional theory evaluation

Financial analysts employed by securities firms play an important role in the capital markets. Most importantly, the reports that they produce are given great consequence by many market participants. A review of the practitioner descriptions and academic studies about these analysts reveal several open questions. For these purposes, institutional theory is brought to bear upon this quasi-professional group. Four specific hypotheses are proposed and evaluated using both latent and manifest content analysis. The results indicate that the work of financial analysis cannot be understood except as part of the social fabric that embeds professional claims. The institutions that surround the delivery of opinions regarding the merits of equity investments are powerful influences on the work product of analysts.