Establishing an evaluation and selection model of brokerage firms research reports

• Main Authors: Yu-Ching Ho, 何玉菁
• Other Authors: Ken Hung
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/33502774962193959686

博士 === 國立東華大學 === 企業管理學系 === 97 === Academic research shows that research reports from brokerage firms are often optimistic or biased due to the brokerage firm analysts’ career concerns and conflicts of interest inside the brokerage firm (e.g. Elton et al. ,1986; Womack, 1996; Barber et al., 2001, 2003; Hong & Kubik, 2003; Azzi, Bird, Ghiringhelli & Rossi, 2006; Cowen, Groysberg & Healy, 2006; Jacob, Rock & Weber, 2008). Therefore, carefully evaluation and selection between reports become a key successful factor of creating superior investment performance. There has been increasing attention from researchers and investors on the information content, investors’ abnormal returns, and validity in these research reports. There is little research on how to evaluate and select useful research reports thus far. Our research is primarily motivated by an underlying desire to better understand how to judge and select useful research reports. By using the Analytic Hierarchy Process (AHP) and modified Delphi method to develop a weighted model preferred by security investment trust companies’ researchers for evaluating and selecting brokerage firm analysts’ research reports , we shed light on security investment trust companies’ researchers’ consideration and selection of various brokerage firm analysts’ research reports. This model provides a distinct approach to examine brokerage firm’s research reports. We establish four main-criteria and nineteen sub-criteria to evaluate brokerage firm’s research reports. The primary criterion is the objective of brokerage firm’s research reports. No bias statement, no serious omission and detail description of information source are key sub-criteria to reach objective. Consistent evaluation of target firm’s industry is also important evaluation sub-criterion. Our results contribute to individual investors, newly employed researchers in security investment trust company, and brokerage firms. In one hand, our results should help individual investors and new employed researchers to better understand the usefulness (and limitations) of brokerage firms’ research report. In the other hand, brokerage firms can provide more valuable research reports to satisfy their clients.