Adam Smith Business School

Professor Yuval Millo, University of Warwick

"The Field of Investment Advice: The Social Forces That Govern Equity Analysts"
Wednesday, 4 October. 2 pm
Room 253, Gilbert Scott Building

Abstract

Literature on equity analysts presents a conundrum: analysts are seen as influential market participants, yet researchers widely criticize them for their bias and inaccuracy. Studies drawing from economic frames struggle to explain this. Therefore, we develop a new conceptualization that positions analysts as actors operating in a social field. Drawing on a qualitative study involving 70 interviews with analysts and portfolio managers, we offer two broad insights. First, we identify long-term interpersonal and interinstitutional ties between buy-side and sell-side actors which contribute to social inertia in the field. Second, we illustrate how sell-side analysts’ social environment is dichotomous, pushing some to converge with consensus estimates, while encouraging others to diverge. Taken as a whole, our findings contribute to the accounting literature by enriching our understanding of the social and institutional forces that govern analyst behavior.

Bio

Yuval Millo is a Professor of Accounting at Warwick Business School, University of Warwick. Yuval’s interdisciplinary research approach combines accounting and sociology and examines the interactions between organisations, markets and society. Yuval is examining currently the development of organisational valuation practices, focusing on investment advice, social impact, index-making and social impact. Yuval’s recent research was published in The Accounting Review, Economy and Society and Human Relations.

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For further information, please contact business-school-research@glasgow.ac.uk

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First published: 25 September 2023