Analyst Workload and Information Production: Evidence from IPO Assignments

Abstract

I examine how changes in analyst workload affect analyst information production. During periods when analysts are working on IPOs, the quality of their research declines for the non-IPO firms they cover at the same time. Consistent with increased workload reducing analyst information production, analysts' forecasts during these periods deviate less from their own prior forecasts and the forecasts of their peers. The reduction in research quality is particularly large among less important portfolio firms. Lastly, I provide evidence that reductions in research quality from IPO-assigned analysts has real effects: increases in analyst workload lead to increases in firm-level information asymmetry.

Keywords: Analyst Workload, Initial Public Offerings, Sell-side Analysts, Consequences to Analyst Research

JEL Classification: G14, G24, G41