The reputational effects of analysts' stock recommendations and credit ratings: Evidence from operational risk announcements in the financial industry
dc.contributor.author | Barakat, A | en |
dc.contributor.author | Ashby, S | en |
dc.contributor.author | Fenn, P | en |
dc.date.accessioned | 2018-01-25T11:02:11Z | |
dc.date.available | 2018-01-25T11:02:11Z | |
dc.date.issued | 2018-01 | en |
dc.identifier.issn | 1057-5219 | en |
dc.identifier.other | C | en |
dc.identifier.uri | http://hdl.handle.net/10026.1/10664 | |
dc.description.abstract |
This paper investigates whether more favorable stock recommendations and higher credit ratings serve as a reputational asset or reputational liability around reputation-damaging events. Analyzing the reputational effects of operational risk announcements incurred by financial institutions, we find that firms with a “Buy” stock recommendation or “Speculative Grade” credit rating are more likely to incur an equity-based reputational damage. In addition, firms with lower credit ratings incur a much more severe debt-based reputational damage. Moreover, credit ratings are more instrumental in mitigating the debt-based reputational damage caused by fraud incidents or incurred in non-banking activities. Furthermore, the misconduct of senior management could demolish the reputation of firms with less heterogeneous stock recommendations. Finally, credit ratings serve as an equity-based reputational asset in the short term but turn into an equity-based reputational liability in the long term. Overall, our analysis reveals that stock recommendations represent a reputational burden and credit ratings act as a reputational shield; however, the persistence and magnitude of such reputational effects are moderated by time and event characteristics. | |
dc.format.extent | 1 - 22 | en |
dc.language.iso | en | en |
dc.publisher | Elsevier | en |
dc.title | The reputational effects of analysts' stock recommendations and credit ratings: Evidence from operational risk announcements in the financial industry | en |
dc.type | Journal Article | |
plymouth.volume | 55 | en |
plymouth.publication-status | Published | en |
plymouth.journal | International Review of Financial Analysis | en |
dc.identifier.doi | 10.1016/j.irfa.2017.10.011 | en |
plymouth.organisational-group | /Plymouth | |
plymouth.organisational-group | /Plymouth/REF 2021 Researchers by UoA | |
plymouth.organisational-group | /Plymouth/REF 2021 Researchers by UoA/UoA17 Business and Management Studies | |
dcterms.dateAccepted | 2017-10-27 | en |
dc.rights.embargodate | 2019-04-28 | en |
dc.rights.embargoperiod | Not known | en |
rioxxterms.versionofrecord | 10.1016/j.irfa.2017.10.011 | en |
rioxxterms.licenseref.uri | http://www.rioxx.net/licenses/all-rights-reserved | en |
rioxxterms.licenseref.startdate | 2018-01 | en |
rioxxterms.type | Journal Article/Review | en |