Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23165
Authors: 
Mizrach, Bruce
Year of Publication: 
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

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