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Financial analyst coverage for U.S. firms facing foreign competition: Evidence from trade liberalization
Journal of International Financial Management & Accounting ( IF 2.808 ) Pub Date : 2019-11-25 , DOI: 10.1111/jifm.12111
Dongyoung Lee 1 , He Wen 2
Affiliation  

This study examines financial analyst coverage for U.S. firms following an increase in foreign product market competition. To capture exogenous shocks to domestic firms' competitive environments, we exploit a quasi‐natural experiment from large import tariff reductions over the 1984 to 2005 period in the manufacturing sector. Using data for the years before and after large tariff reductions, our difference‐in‐differences analysis shows evidence of a significant decrease in analyst coverage for incumbent U.S. firms when they face greater entry threat from foreign competitors. We also find that analysts with less firm‐specific experience and less accurate prior‐period forecasts are more likely to stop following the domestic firm when foreign competition intensifies. Overall, the findings suggest that foreign product market competition from global trade liberalization is an important determinant of financial analysts' coverage decisions.

中文翻译:

面对外国竞争的美国公司的财务分析师报道:贸易自由化的证据

这项研究调查了外国产品市场竞争加剧之后美国公司的财务分析师覆盖率。为了捕获对国内公司竞争环境的外在冲击,我们利用了一个准自然实验,即从1984年至2005年的制造业进口关税大幅降低。通过使用大幅度降低关税之前和之后的数据,我们的差异分析表明,当现任美国公司面临来自外国竞争对手的更大进入威胁时,分析师的研究覆盖率就会大大降低。我们还发现,当外国竞争加剧时,缺乏特定公司经验和较不准确的前期预测的分析师更有可能停止追随国内公司。总体,
更新日期:2019-11-25
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