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HEC Paris Finance professor, François Derrien, analyses the Real Effects of Financial Shocks

27 September 2012

Co-authored with Ambrus Kecskes, of Virginia Polytechnic Institute & State University, François Derrien recently published a research article accepted by the Journal of Finance and entitled 'The Real Effects of Financial Shocks: Evidence from Exogenous Changes in Analyst Coverage'

In this paper, François Derrien and Ambrus Kecskes analyze the real effects of a decrease in analyst coverage. They show that when a firm loses an analyst, its informational environment deteriorates. As a consequence, the firm's cost of financing goes up, which causes the firm to decrease its investment.

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