Institutions, firms and the market for information

In my first essay, I investigate the impact of regulatory change and analysts' rankings in shaping the production and quality of research output by sell side analysts. I find evidence that following regulatory changes in early 2000s, analysts' rankings and tournament economics played a greater role in shaping analysts' incentives. This has induced seasonality into the quality and frequency of analyst stock picks. In the aggregate, abnormal returns associated with positive opinion changes in the post regulatory environment are positive, statistically significant and of greater economic value. However, low prestige analysts upgrade investment opinions more frequently when investors vote on analysts' rankings but with worse results. Good stock picking is rewarded in the market place in terms of the analysts' rankings and positive job mobility and appears more important than accurate earnings' forecasts.;My second essay is joint work with Zhong Zhang, a fellow PhD student here in the Kelley School of Business. We examine the impact of Regulation Fair Disclosure (Reg FD) on informed trading employing the novel and unexplored setting of broker sponsored investor conferences. We employ a difference-in-difference analysis to investigate the impact of Reg FD on conference presenting firms' microstructure properties, comparing results to non-presenting control firms. Our current results do not support the view in the literature that Reg FD has been effective in mitigating selective disclosure.;My last essay examines the cost and benefits of various governance mandates promulgated in the early 2000s to improve corporate board independence. Specifically, I test the extent to which government forced board independence mandates influenced firm innovation. I exploit the fact that a collection of firms were forced to alter the composition of their Board of Directors due to the passage of the Sarbanes-Oxley Act in 2002. I compare innovation for this treatment group vs. a control to determine the extent to which innovation for the treatment group was influenced by the altered board composition. I find that my treatment group was more innovative following the regulatory change, although the most innovative firms appear to have been impaired.