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Do broker/analyst conflicts matter? Detecting evidence from internet trading platforms
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SYSNO ASEP 0392390 Document Type C - Proceedings Paper (int. conf.) R&D Document Type Conference Paper Title Do broker/analyst conflicts matter? Detecting evidence from internet trading platforms Author(s) Hanousek, Jan (NHU-C) RID
Kopřiva, František (NHU-C) RIDSource Title Proceedings of 30th International Conference Mathematical Methods in Economics. - Karviná : Silesian University in Opava, School of Business Administration in Karviná, 2012 / Ramík Jaroslav ; Stavárek Daniel - ISBN 978-80-7248-779-0 Pages s. 255-259 Number of pages 5 s. Publication form Print - P Action 30th International Conference Mathematical Methods in Economics 2012 Event date 11.09.2012-13.09.2012 VEvent location Karviná Country CZ - Czech Republic Event type CST Language eng - English Country CZ - Czech Republic Keywords dealers’ market ; emerging markets ; informed trading Subject RIV AH - Economics R&D Projects GAP403/11/0020 GA ČR - Czech Science Foundation (CSF) Institutional support NHU-C - PRVOUK-P23 UT WOS 000316715900044 Annotation We analyze the potential conflict of interest between analysts and brokers associated with each other. In contrast to the existing literature we do not analyze prediction accuracy and/or biases in analyst recommendations. Instead we focus our analysis on brokers and examine whether their behavior systematically differs before and after investment recommendations are released. The evolution and dynamics of brokers quotes and trades are used to test for systematic trading patterns around the release of one's own investment recommendation. In the model we control for brokers' responses to other investment advice and employ a SUR estimation framework. Data from the Prague Stock Exchange are used to demonstrate our methodology. Finding significant and systematic differences in brokers' behavior, we conclude that misuse of investment recommendations is widespread. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2014 Electronic address http://mme2012.opf.slu.cz/proceedings/pdf/044_Hanousek.pdf
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