AI-powered Analysts
We explore how brokerage firms’ investments in artificial intelligence (AI) affect their analysts’ information production. We find that analysts employed at brokerage firms with greater AI integration issue more accurate earnings forecasts. Cross-sectional analyses reveal that AI’s benefits are more pronounced for analysts with less firm-specific experience and when the firm’s disclosures are more readable.
Do Credit Rating Agencies Learn from the Options Market?
Do credit rating agencies (CRAs) learn from the options market? We examine this question by exploring the relation between options trading activity and credit rating accuracy. We find that as options trading volume increases, credit ratings become more responsive to expected credit risk and exhibit greater ability to predict future defaults. We also find that CRAs rely more on the options market as a source of ratings-related information when firm default risk is higher, options trading is more informative, manager-provided information is of lower quality, and firm uncertainty is higher.
How Thomson Reuters Impacts Street Earnings
In research published in the Journal of Accounting Research, Smith accounting professor Musa Subasi and his co-authors looked at how Thomson Reuters produces and distributes street earnings to better understand the role forecast data providers play in capital markets.
The Value of the CAPEX Forecast
New research looks at the capital expenditure, or CAPEX, forecast to see how it influences company investment behavior.
Slow Motion Earnings Revisions on Wall Street
Time required to collect, process and distribute information ranges from nine minutes to nearly five days for Thomson Reuters.