Earning the 'write to speak': sell-side analysts and their struggle to be heard

Spence, C., Aleksanyan, M. , Millo, Y., Imam, S. and Abhayawansa, S. (2019) Earning the 'write to speak': sell-side analysts and their struggle to be heard. Contemporary Accounting Research, 36(4), pp. 2635-2662. (doi: 10.1111/1911-3846.12496)

Abstract

This paper explores the ways in which sell‐side (SS) financial analysts seek to position themselves advantageously within the wider field of investment advice in spite of widespread skepticism over the value that their forecasts and recommendations add to investment decisions. The field of investment advice has been characterized in recent years by a number of regulatory and technological changes that have forced SS analysts to reconstitute the ways in which they influence the investment decisions of buy‐side (BS) actors. Faced with existential threats, SS analysts have responded to the disruptive impact of technology and regulation by struggling hard to ensure that their services are still valued by fund managers. Key to this ongoing process is the recalibration of professional expertise, which previous research has alluded to but not explored in detail. Central to the persistence of SS analysts in processes of investment decision making are activities revolving around the production and use of analyst reports which, our findings indicate, are less valuable for their informational content than their role as “relational devices,” ascribing legitimacy to SS analysts and earning them an entry ticket to more substantive, value‐adding interactions with companies and BS actors. We also show that economic considerations in the area of investment advice are influenced by social ties, the motivations of various actors in the field, and their relative position vis‐à‐vis other actors. More generally, we contribute to the literature on professional projects by showing how professional groups are constantly engaged in attempts to reposition themselves in the social space, but that field‐level changes can restrict the outcomes of these strategies to mitigation rather than advancement for the professionals concerned.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Abhayawansa, Dr Subhash and Aleksanyan, Dr Mark
• Authors: Spence, C., Aleksanyan, M., Millo, Y., Imam, S., and Abhayawansa, S.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Contemporary Accounting Research
• Publisher: Canadian Academic Accounting Association
• ISSN: 0823-9150
• ISSN (Online): 1911-3846
• Published Online: 02 May 2019
• Copyright Holders: Copyright © 2019 CAAA
• First Published: First published in Contemporary Accounting Research 36:2635-2662
• Publisher Policy: Reproduced in accordance with the publisher copyright policy