In the Bull's eye of Sell-Side Analysts Value Creation:

Beyond intermediation of information

Document identifier: oai:DiVA.org:ltu-76334
Keyword: Social Sciences, Economics and Business, Business Administration, Samhällsvetenskap, Ekonomi och näringsliv, Företagsekonomi, Entreprenörskap och innovation, Entrepreneurship and Innovation
Publication year: 2019
Relevant Sustainable Development Goals (SDGs):
SDG 16 Peace, justice and strong institutionsSDG 9 Industry, innovation and infrastructure
The SDG label(s) above have been assigned by OSDG.ai

Abstract:

Globalization and digitalization are two critical trends as game changers in the stock market that also expect to impact on the sell-side analysts’ role in front of  investors’. A relevant question to pose is whether financial analysts’ are a dying art of practice due to sophisticated digital analyses where geographical distance doesn’t matter anymore. The purpose of this paper is to increase the knowledge of the sell-side analysts’ value creation processes in the globalized and digital era. The article is based on an empirical study of 25 sell-side financial analysts and their work with value creation. Findings indicate that the social capital become even more important in the competitive game of finding unique investment opportunities. Financial analyst operating in highly competitive environments applies strategies beyond the role of merely acting as information intermediaries. There is more than enough information available while information and analyses needs to be selected and interpreted for becoming relevant and adding value for the investors’ decision making. Information need to be contextualized. The analysts’ role as facilitators in investment decision implies acting as enablers of information, generating of analyses, sense-making actors and co-creators in front of the investors. The art of developing social capital is central for bonding with the clients and to assure for future businesses. Valuable assets of social capital are made available through development of cognitive social capital, relational social capital and structural social capital. We find that analysts as a profession not is a dying art but instead is part of the game changing in stock market and that social capital is crucial for analysts role as facilitators in investors decision making processes.

Authors

Jeaneth Johansson

Luleå tekniska universitet; Industriell Ekonomi
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Marita Blomkvist

Göteborgs Universitet
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