| This dissertation studies stock recommendations made by columnists and financial analysts. The first essay examines the value and profitability of columnist recommendations published in the Business Week, Forbes and Fortune magazines. Empirical results show that columnist recommendations are not profitable in the short- or long-run controlling for market risk, book-to-market, size and momentum effects. The second essay examines the relation between the value of analysts' recommendations and corporate research and development (R&D) investments. Univariate, calendar-time portfolio and cross-sectional analyses controlling for risk, business complexity, earnings value-relevance, analyst coverage, institutional ownership and bid-ask spread indicate the value of analysts' recommendations to be significantly more valuable for firms that are more intensely engaged in R&D investments. The final essay, using stock recommendations, examines Regulation FD's impact on corporate practice of earnings-related selective disclosure to financial analysts. The comparative analysis of the association between analysts' revisions and subsequent earnings surprises, in the pre- and post- Regulation FD periods reveals a significant reduction in analysts' earnings-related private information in the post-Regulation FD period. |
