The great sell-side sell-off: evidence of declining financial analyst coverage

Purpose Motivated by significant global developments affecting the sell-side industry, in particular a shift toward passive investments and growing regulation, this study examines whether financial analyst coverage declined over past decade if any loss of is associated with change forecast accuracy. Design/methodology/approach After investigating, confirming, general decline following, authors calculate relative to firm-specific maximum between 2009 2013. In multivariate analyses, then examine differs across geographic region, firm size capital market development, it consensus Findings Results indicate that 2011 2021, globally 17.8%, while EU was an even greater, 28.5%. Within EU, results are most pronounced for small-cap firms. As consequence coverage, observe accuracy, firms domiciled non-developed markets faring worst. Originality/value This first document concerning decade. The provide broad-based empirical support anecdotal reports smaller those bear brunt consequences stemming from changes industry.