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Sell-side equity analysts and equity sales: a study of interaction

Lee, Kenneth and Manochin, Melina (2021) Sell-side equity analysts and equity sales: a study of interaction. British Accounting Review. ISSN 0890-8389

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Identification Number: 10.1016/j.bar.2021.100977

Abstract

The extensive literature on sell-side analysts makes little reference to equity sales as a significant economic actor in the field. Drawing on a recent field study, our empirical evidence identified equity sales teams within brokers, who promote research to external clients, as a powerful agent cluster in close time-space proximity to analysts. This paper sheds light on analyst-sales interactions, which we contend represent an important field condition. The study employs concepts from strong structuration theory, in particular position-practice relations, to develop a narrative about sell-side analysts’ and sales team positional obligations, privileges, power relations and matters of trust. Our study makes three contributions. Firstly, we identify the symbiosis embedded in the relationship between sales and research - analysts need equity sales to market their product, to positively influence client perceptions of analysts and to provide access to prized fund managers. In turn, sales need analysts to provide content for them to market. Secondly, integral to sales-analyst interactions is the provision of feedback, which causes difficulties in the relationship, leaving analysts vulnerable to sales influence. Thirdly, regulatory tension has changed sales-analyst interactions, and this can enrich our understanding of why analysts continue to publish commoditised research into highly competitive markets.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/the-british-...
Additional Information: © 2021 British Accounting Association
Divisions: Accounting
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Date Deposited: 04 Mar 2021 16:15
Last Modified: 20 Apr 2021 03:21
URI: http://eprints.lse.ac.uk/id/eprint/108953

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