Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9726004 | International Review of Financial Analysis | 2005 | 15 Pages |
Abstract
The paper examines the monitoring power of security analysts from the manager-shareholder conflict perspective. Our evidence supports the view that security analysis acts as a monitoring mechanism in reducing agency costs for smaller as opposed to larger firms. Moreover, we also find evidence that security analysis has a positive and significant impact on firm value only for smaller firms. These findings support the proposition that, as firms grow larger and more complex, the monitoring activity of security analysis becomes less effective. Our evidence also shows that the monitoring role of security analysts is not restricted to the US capital market environment.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
John A. Doukas, Phillip J. McKnight, Christos Pantzalis,