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Title:Analyst Recommendations and Nasdaq Market Making Activity PDF Logo
Authors:Mizrach, Bruce
Issue Date:2003
Series/Report no.:Working papers / Rutgers University, Department of Economics 2003,07
Abstract:I investigate the linkage between liquidity provision by Nasdaq market makers and analysts in the same firm. Using three measures of market activity, I find that Nasdaq firms are more likely to provide buy side liquidity in anticipation of upgrades in the period 1999-2000. ECN activity supports this pattern. Firm level evidence shows that 15 of 42 market makers studied engage in significant pre-recommendation activity. I estimate cumulative abnormal returns of more than 75% and profits of almost $600 million in a sample of 47 large capitalization stocks.
Subjects:analyst
Nasdaq
market maker
JEL:G24
G14
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, Rutgers University

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