Topic：Product Similarity and Sell-Side Analysts
Time：July 18, 2013（Thursday）15:00-16：30
Venue：Room 501, Jiageng Bld 2
Presenter：Charles Hsu，associate professor of Accounting, HKUST
Chair：Tony Ruan, assistant professor of finance, IFAS
Abstract：
We document the impact of product similarity on sell-side analysts at three distinct levels. At the firm level, firms with greater product similarity have greater analyst coverage and forecast accuracy, and smaller forecast dispersion. At the analyst-firm level, analysts add a firm to (drop a firm from) their portfolios if its product is more (less) similar to the other firms in their portfolios, and analysts issue more accurate forecasts than other analysts covering the same firm when the firm is more similar to the other firms in their portfolios. At the analyst level, analysts whose portfolios comprise firms with greater product similarity are less likely to be fired and more likely to be all-stars. These results contribute to our understanding of the first-order importance of product similarity to analysts’ coverage decisions, performance, and career outcomes, and provide an explanation for analysts’ industry specialization.
Presenter Introduction：
Charles Hsu is a tenured associate professor at the Department of Accounting, School of Business and Management, Hong Kong University of Science and Technology (HKUST). He obtained his PhD in accounting from Purdue University, master degree in applied statistics from Louisiana State University, and bachelor degree in accounting from Xiamen University. Prof. Hsu has published articles in the top accounting and finance journals such as Journal of Accounting and Economics, Journal of Finance, and Contemporary Accounting Research. He is an ad hoc reviewer for several journals including Journal of Finance, The Accounting Review, and European Accounting Review. He is an editorial board member of European Accounting Review.
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