WRDS Best Paper Award Highlights Analyst Influence on Corporate Policies

Philadelphia, PAWharton Research Data Services (WRDS), the leading data research platform and business intelligence tool for corporate, academic and government institutions worldwide, is proud to announce the winners of the Southern Finance Association Wharton-WRDS Best Paper Award. The award winners, Francois Degeorge, Faculty of Economics, University of Lugano; Swiss Finance Institute; European Corporate Governance Institute (ECGI); François Derrien, Finance Department, HEC Paris; Ambrus Kecskes, Schulich School of Business, York University; and Sebastien Michenaud, Jesse H. Jones Graduate School of Business, Rice University, examined analyst influence on corporate policies. Their paper Do Analysts’ Preferences Affect Corporate Policies? suggests that firms make policies, to some extent, to be consistent with the preferences of analysts covering their firms. WRDS, a part of the Wharton School of the University of Pennsylvania, is trusted by universities across the globe and fundamental to accelerate impactful research and enhance learning.

“WRDS has a long history of supporting cutting-edge research and we are very pleased to be able to sponsor this Best Paper Award,” said Robert Zarazowski, Managing Director of WRDS. “Advancing knowledge is what we’re all about and WRDS is delighted to congratulate these scholars for their thoughtful research about analyst impact on corporate policies.”

It is well known that stock prices react, sometimes very sharply, when analysts change their investment recommendations or earnings estimates. However, researchers are only recently starting to understand how analysts’ perspectives influence corporate behavior, including the investment, financing, and payout decisions that firms make.

Degeorge, Derrien, Kecskes and Michenaud’s paper shows that sell-side research analysts are providing important insights to both investors and management of the firms they cover, including advice about key decisions like raising debt vs. equity financing to fund projects, and whether to pay out cash holdings to shareholders. Analysts, therefore, can be seen as very useful to corporate leadership, as well as having significant influence.

“It is a wonderful honor for us to receive this Best Paper Award and we are grateful to WRDS for recognizing our research efforts and helping us share our findings,” said Francois Degeorge. “We hope that our work contributes positively to the field of knowledge and furthers other research on the topic.”

About WRDS
Wharton Research Data Services (WRDS) is the leading data research platform and business intelligence tool for over 30,000 corporate, academic, government and nonprofit clients at over 375 institutions in 33 countries. WRDS provides the user with one location to access over 200 terabytes of data across multiple disciplines including Accounting, Banking, Economics, Finance, Insurance, Marketing, and Statistics. Flexible data delivery options include a powerful web query method that reduces research time, the WRDS Cloud for executing research and strategy development, and the WRDS client server using PCSAS, Matlab, Python and R. Our Analytics team, doctoral-level support and rigorous data review and validation give clients the confidence to tailor research within complex databases and create a wide range of reliable data models.

From partnerships with data vendors, to our own tools including the WRDS SEC Analytics Suite, WRDS Quant Alpha Platform, and the Wharton School’s OTIS — WRDS is the global standard in data management and research, all backed by the credibility and leadership of the Wharton School.

About the Wharton School
Founded in 1881 as the first collegiate business school, the Wharton School of the University of Pennsylvania is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. With a broad global community and one of the most published business school faculties, Wharton creates economic and social value around the world. The School has 5,000 undergraduate, MBA, executive MBA, and doctoral students; more than 9,000 participants in executive education programs annually and a powerful alumni network of 93,000 graduates.