Publication:
Does corporate governance quality affect analyst coverage? Evidence from the Institutional Shareholder Services (ISS)

Issued Date

2015-01-01

Resource Type

Article

ISSN

14664291
13504851

DOI

10.1080/13504851.2014.939372

Other identifier(s)

2-s2.0-84916934682

Rights

Mahidol University

Rights Holder(s)

SCOPUS

Bibliographic Citation

Applied Economics Letters. Vol.22, No.4 (2015), 312-317

Suggested Citation

Pandej Chintrakarn, Pornsit Jiraporn, Young Kim, Jang Chul Kim Does corporate governance quality affect analyst coverage? Evidence from the Institutional Shareholder Services (ISS). Applied Economics Letters. Vol.22, No.4 (2015), 312-317. doi:10.1080/13504851.2014.939372 Retrieved from: https://repository.li.mahidol.ac.th/handle/123456789/35896

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Title

Does corporate governance quality affect analyst coverage? Evidence from the Institutional Shareholder Services (ISS)

Author(s)

Pandej Chintrakarn
 Pornsit Jiraporn
 Young Kim
 Jang Chul Kim

Other Contributor(s)

Mahidol University
 Pennsylvania State University
 Northern Kentucky University

Abstract

© 2014, © 2014 Taylor & Francis. We examine the impact of corporate governance quality on the extent of analyst coverage. The evidence based on nearly 3000 firms indicates that more analysts are likely to cover firms with weaker corporate governance. In particular, as corporate governance quality falls by one SD, analyst following increases by 11.40%. Our evidence is consistent with the notion that poor governance results in a wider divergence between the stock’s market price and the fundamental value. Analysts prefer to cover companies with poor governance because it allows them to generate trading commissions by offering shareholders a particularly compelling story about why a stock’s fundamental value and the current price differ.

Keyword(s)

Economics, Econometrics and Finance

Availability

URI

https://repository.li.mahidol.ac.th/handle/123456789/35896

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Scopus 2011-2015
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