Does competition between stars increase output? Evidence from financial analyst forecasts
Files
First author draft
Date
2019-11-04
DOI
Authors
Aharoni, Gil
Shemesh, Joshua
Zapatero, Fernando
Version
First author draft
OA Version
Citation
Aharoni, Gil and Shemesh, Joshua and Zapatero, Fernando, Does Competition between Stars Increase Output? Evidence from Financial Analyst Forecasts (November 1, 2019). Available at SSRN: https://ssrn.com/abstract=2427567 or http://dx.doi.org/10.2139/ssrn.2427567
Abstract
Top sportsmen often refer to competition against other top sportsmen as a motivation to exert more effort. We examine whether a similar pattern exists among another group of top professionals – star analysts. Our evidence suggests that star analysts concentrate their efforts and generate substantially more accurate earnings forecasts in multi-star stocks, in which they cross paths with other stars. We further show that the higher accuracy in multi-star stocks is not driven by other changes in the information environment of the firms. Our results suggest that competition among stars has substantial effects on the largest firms in financial markets.