While Merton (1987) proposes that firm value increases with the number of shareholders, relatively few studies have explicitly sought to identify the factors that affect investor participation per se in equity markets. Using a unique dataset that measures the inflow and outflow of equity...

There is a substantial divide between evidence in the empirical literature and survey evidence in the financial press regarding the influence of sell-side analyst recommendations on the trading of mutual funds. While surveys of fund managers suggest that they assign little weight to analyst...

Estimates of the equity risk premium implied by analyst forecasts — generally 2 to 4 percent — are often significantly below realized equity returns of 6 percent. Measurement error could result from conservative assumptions, reliance upon consensus rather than detailed forecasts, the use of...