Do Financial Analysts Help Improve Firm Productivity?

Academic researchers in corporate finance have in recent years taken a renewed interest in the impact of private firms on employment, growth, and other positive developments in national economies. In a recent article, we develop this new field of research by looking at how the financial system can foster (or hinder) a firm’s ability to make productive investments. Access to capital is a key factor in the success of firms with valuable investment opportunities, and financial analysts could improve access to external financing by producing and disseminating firm-specific information. As such, researchers have found that analysts help to reduce information … Read more