When Is the Client King? Evidence from Affiliated‐Analyst Recommendations in China's Split‐Share Reform
Abstract
China's split‐share reform of 2005 (the Reform) converts the previously restricted shares held by founding shareholders to shares tradable on the open market. Against this backdrop, we study how underwriter‐affiliated analysts and firms' large shareholders interact in the event of the latter's sales of restricted shares. We document that recommendations made by affiliated analysts are significantly more optimistic when firms' large shareholders...
Paper Details
Title
When Is the Client King? Evidence from Affiliated‐Analyst Recommendations in China's Split‐Share Reform
Published Date
Mar 26, 2020
Volume
37
Issue
2
Pages
1044 - 1072
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