Do CEOs’ characteristics impact sell-side analysts’ recommendations?

Purpose - This study examines the association between CEOs’ characteristics and sell-side analysts’ recommendations.
Design/methodology/approach - This study uses a sample of firms listed on the London Stock Exchange and uses two databases, Capital IQ and BoardEx to study the above relationship. A variety of regression analyses are used in the empirical models, including OLS, Fixed effect, random effect, Tobit, Logit, and GMM.
Findings - We find that firms with CEOs who had a wider network size and firms with foreign CEOs receive favourable investment recommendations. Further, firms with CEOs who have more time to retire are more likely to receive favourable investment recommendations. However, we find that firms with CEOs with more qualifications receive unfavourable recommendations and female CEOs are not affecting investment recommendations.
Originality/value - Ultimately, this study demonstrates the importance of CEO characteristics for sell-side analysts who play an important role in the stock markets.