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Determinants of sell‐side financial analysts’ use of non‐financial information

Determinants of sell‐side financial analysts’ use of non‐financial information Abstract This paper aims to research the context within which sell‐side financial analysts make decisions to use corporate non‐financial information. Prior research has demonstrated that financial analysts take into account non‐financial information in their analyses of firms, but knowledge is scarce about what determines their use of this information. Based on a survey conducted among Belgian financial analysts, we observe a significant negative association between the financial analysts’ use of non‐financial information and the earnings informativeness of a firm's financial statement information proxied by leverage and stock return volatility. We also find that a higher amount of non‐financial information is used by less experienced financial analysts and by financial analysts covering a higher number of firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting and Business Research Taylor & Francis

Determinants of sell‐side financial analysts’ use of non‐financial information

Accounting and Business Research , Volume 40 (1): 15 – Jan 1, 2010
15 pages

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References (115)

Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
2159-4260
eISSN
0001-4788
DOI
10.1080/00014788.2010.9663383
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper aims to research the context within which sell‐side financial analysts make decisions to use corporate non‐financial information. Prior research has demonstrated that financial analysts take into account non‐financial information in their analyses of firms, but knowledge is scarce about what determines their use of this information. Based on a survey conducted among Belgian financial analysts, we observe a significant negative association between the financial analysts’ use of non‐financial information and the earnings informativeness of a firm's financial statement information proxied by leverage and stock return volatility. We also find that a higher amount of non‐financial information is used by less experienced financial analysts and by financial analysts covering a higher number of firms.

Journal

Accounting and Business ResearchTaylor & Francis

Published: Jan 1, 2010

Keywords: financial analysts; market for information; non‐financial information

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