Javad Rajabalizadeh - Department of Accounting and Finance, Turku School of Economics University of Turku, Finland

This study explores the primary factors influencing the number of analysts following a firm. The research sample comprises ۱۱,۴۵۹ non-U.S. firms, followed by various unique analysts during ۲۰۱۹ and ۲۰۲۰. The study proposes a straightforward model of analyst following, identifying several firm characteristics likely to affect the aggregate demand or supply of analyst services for a particular firm. A regression model tests the relationship between analyst following and high-technology firms (as proxied by R&D expenses) and firm size. The results reveal that, in the following year, analysts are more inclined to follow firms with a higher volume of R&D expenses and larger size in the current year. The study also uncovers that most control variables regarding firm characteristics significantly affect analyst following. In summary, the empirical results are consistent with economic intuition.

financial analysts, Firms’ Coverage, R&D, Size