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EQUITY RESEARCH CREDIBILITY IN THE ITALIAN STOCK MARKET
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Enrico Maria Cervellati 
, Antonio Carlo Francesco Della Bina , Pierpaolo Pattitoni
Abstract
In this paper we verify the degree of reliability of brokerage analysts’ recommendations, with reference to Italian IPOs and measure their long-term performance, distinguishing among affiliated and non-affiliated analysts, to test the conflict of interests hypothesis against an alternative ‘superior information hypothesis’. The empirical evidence shows that IPOs recommended by affiliated analysts have a long-run performance that is worse than firms recommended by unaffiliated ones by a relevant amout. This result supports the conflict of interest hypothesis, while it seems to be inconsistent with the hypothesis that underwriter analysts have superior information.
Keywords: Initial Public Offerings, Brokerage Analysts, Conflict of Interests, Market Reaction, Long-run Performance
How to cite this paper: Cervellati, E. M., Della Bina, A. C. F., & Pattitoni, P.(2007). Equity research credibility in the Italian stock market. [Special Issue]. Corporate Ownership & Control, 4(4-4), 59-77. https://doi.org/10.22495/cocv4i4c4p6
