Competing for narrative authority in capital markets: Activist short sellers vs. financial analysts

IF 3.6 2区 管理学 Q1 BUSINESS, FINANCE Accounting Organizations and Society Pub Date : 2022-07-01 DOI:10.1016/j.aos.2022.101334
Hervé Stolowy , Luc Paugam , Yves Gendron
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引用次数: 7

Abstract

Activist short sellers (AShSs) and financial analysts are information intermediaries who analyze firm disclosures as well as produce and disseminate influential investment narratives. This study aims to better understand narrative challenges surrounding the legitimate expertise of financial analysts. Specifically, we examine how AShSs challenge sell-side financial analysts' narrative authority (i.e., the perception that they produce expert knowledge) in interpreting firms' performance and future prospects. We investigate how analysts respond (or do not respond) to this challenge. We use 442 AShS reports, 12 interviews with AShSs and analysts, and analysts' stock recommendations and target prices. In their criticisms of analysts (found in one-third of reports), AShSs frequently frame analysts as lacking market expertise and critical thinking – two core dimensions of analysts' narrative authority. Sixty-six percent of analysts, although explicitly criticized in AShS reports, do not engage in written responses in their equity research reports because they reportedly either adopt a renunciation attitude to the challenge or they engage in off-the-record discussions with certain market participants. However, 34% of analysts respond overtly by counter-framing AShSs as lacking market expertise and objectivity. After the dissemination of AShS reports, analysts, on average, do not revise their highly visible stock recommendations but they revise target prices downward. Theoretically, this study extends our understanding of the construction of narrative authority in capital markets as we examine a challenge to the expertise of influential information intermediaries.

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资本市场话语权之争:激进卖空者与金融分析师
激进卖空者(AShSs)和金融分析师是信息中介,他们分析公司披露的信息,并制作和传播有影响力的投资故事。本研究旨在更好地理解围绕金融分析师合法专业知识的叙事挑战。具体而言,我们研究了卖方金融分析师在解释公司业绩和未来前景时如何挑战其叙事权威(即,他们产生专业知识的看法)。我们将调查分析师如何应对(或不应对)这一挑战。我们使用了442份AShS报告,12位采访AShS和分析师,以及分析师的股票推荐和目标价。在对分析师的批评中(在三分之一的报告中发现),安全顾问经常将分析师描述为缺乏市场专业知识和批判性思维——这是分析师叙事权威的两个核心维度。66%的分析师虽然在AShS报告中受到明确批评,但并未在其股票研究报告中做出书面回应,因为据报道,他们要么对挑战采取放弃态度,要么与某些市场参与者进行非正式讨论。然而,34%的分析师公然反驳说,安全服务提供者缺乏市场专业知识和客观性。在AShS报告发布后,分析师一般不会修改他们非常显眼的股票推荐,但会下调目标价。从理论上讲,本研究扩展了我们对资本市场叙事权威构建的理解,因为我们研究了对有影响力的信息中介的专业知识的挑战。
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来源期刊
CiteScore
7.80
自引率
6.40%
发文量
38
期刊介绍: Accounting, Organizations & Society is a major international journal concerned with all aspects of the relationship between accounting and human behaviour, organizational structures and processes, and the changing social and political environment of the enterprise.
期刊最新文献
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