The reputational effects of analysts' stock recommendations and credit ratings: Evidence from operational risk announcements in the financial industry
dc.contributor.author | Barakat, Ahmed | |
dc.contributor.author | Ashby, Simon | |
dc.contributor.author | Fenn, Paul | |
dc.date.accessioned | 2019-04-22T19:16:35Z | |
dc.date.available | 2019-04-22T19:16:35Z | |
dc.date.issued | 2018 | en_US |
dc.identifier.issn | 1057-5219 | |
dc.identifier.doi | 10.1016/j.irfa.2017.10.011 | |
dc.identifier.uri | http://hdl.handle.net/20.500.12127/6237 | |
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. | en_US |
dc.language.iso | en | en_US |
dc.publisher | Elsevier | en_US |
dc.subject | Reputational Risk | en_US |
dc.subject | Operational Risk | en_US |
dc.subject | Financial Analysts | en_US |
dc.subject | Stock Recommendations | en_US |
dc.subject | Credit Ratings | en_US |
dc.subject | Financial Institutions | en_US |
dc.title | The reputational effects of analysts' stock recommendations and credit ratings: Evidence from operational risk announcements in the financial industry | en_US |
refterms.dateFOA | 2019-04-26T09:32:00Z | |
dc.identifier.journal | International Review of Financial Analysis | en_US |
dc.source.volume | 55 | en_US |
dc.source.issue | 1 | en_US |
dc.source.beginpage | 1 | en_US |
dc.source.endpage | 22 | en_US |
dc.contributor.department | University of Nottingham | en_US |
vlerick.knowledgedomain | Accounting & Finance | en_US |
vlerick.knowledgedomain | Special Industries : Financial Services Management | en_US |
vlerick.typearticle | Journal article with impact factor | |
vlerick.vlerickdepartment | AF | en_US |
dc.identifier.vperid | 258194 | en_US |