Discussion of “Analysts’ industry expertise”☆

Abstract

Kadan et al. (this issue) examine whether financial analysts exhibit industry expertise. It is not obvious from the title, but the study actually examines two different types of analysts: firm-specific analysts that have been examined extensively in prior research, and the rarer industry analysts who provide outlooks on whole industries. This study is the first to examine a large sample of explicit industry recommendations, and provides a fresh insight into an important aspect of financial research—industry expertise. In this discussion, I assess the motivation, contribution and empirical procedures within the context of capital markets research on sell-side analysts