Do Professional Rankings Affect Analyst Behavior? Evidence from a Regression Discontinuity Design

We examine how winning an all-star award affects analyst behavior. Using a novel dataset on analyst rankings, we employ a regression discontinuity design that compares the research outputs of third-place all-star analysts and runner-up analysts who barely miss the distinction. We find that winning an award makes analysts more optimistic in their forecasts and recommendations and enables them to move the markets. Winning analysts obtain higher priority during earnings conference calls and have better career outcomes. Overall, our evidence is consistent with award-winning analysts leveraging increased reputation and the associated market influence to induce more trade commissions and career benefits