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Investment Sensitivity to Stock Prices and Analyst Coverage

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DOI: 10.4236/ajibm.2015.53010    3,290 Downloads   4,094 Views  


This study examines whether more analyst coverage mitigates the informational risk borne by small investors. Using the investment-price sensitivity as a proxy for stock price informativeness, we find evidence that analysts do not specialize in the production of firm-specific information and substitute for other corporate governance mechanisms. Our results suggest that analysts are out-siders who have less access to firm-level information. The main findings are robust to many aspects of our methodology.

Conflicts of Interest

The authors declare no conflicts of interest.

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Marhfor, A. , Ghilal, R. and M’Zali, B. (2015) Investment Sensitivity to Stock Prices and Analyst Coverage. American Journal of Industrial and Business Management, 5, 90-101. doi: 10.4236/ajibm.2015.53010.


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