Analyzing the Analysts: The Effects of Technical and Social Skills on Analyst Performance and Careers

54 Pages Posted: 26 Aug 2020

See all articles by Congcong Li

Congcong Li

Duquesne University - A.J. Palumbo School of Business Administration

An-Ping Lin

Singapore Management University - School of Accountancy

Hai Lu

University of Toronto - Rotman School of Management

Date Written: July 20, 2020

Abstract

This paper investigates the effects of financial analysts’ technical and social skills on their performance and career advancement. Using financial analysts’ LinkedIn profiles, we find that analysts with strong technical skills endorsed by LinkedIn connections generate more accurate earnings forecasts and more profitable stock recommendations. Analysts with better social skills, proxied by the number of LinkedIn connections, have better communications with corporate management during conference calls and also produce more accurate earnings forecasts. Their stock recommendations are not more profitable but receive stronger market reactions. Further, these sociable analysts are more likely to be voted as All-Star Analysts and to move to high-status brokerage firms when they change jobs. These findings provide the first large-sample evidence on the different roles of technical and social skills in the financial industry.

Keywords: Analysts, Skills, Connections, Labor Market, Social Media

JEL Classification: D83, G11, G24, J24, J44, M41

Suggested Citation

Li, Congcong and Lin, An-Ping and Lu, Hai, Analyzing the Analysts: The Effects of Technical and Social Skills on Analyst Performance and Careers (July 20, 2020). Singapore Management University School of Accountancy Research Paper No. 2023-165, Available at SSRN: https://ssrn.com/abstract=3656427 or http://dx.doi.org/10.2139/ssrn.3656427

Congcong Li

Duquesne University - A.J. Palumbo School of Business Administration ( email )

Pittsburgh, PA 15282
United States

An-Ping Lin

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

Hai Lu (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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