Sell-side analysts as social intermediaries

Abstract

Recent research on sell-side analysts emphasizes the centrality of social ties and social interactions to what they do. However, we know little about how analysts create or maintain relationships over both the short and long terms. We remedy that in this qualitative study by illustrating the microlevel processes that analysts engage in as part of developing a network of relations around them. Starting from the premise that economic actions are embedded in social relations and drawing on interviews with analysts, fund managers, and investor relations officers in China, we show how analysts forge both weak and strong social ties to create an infrastructure of social networks that is foundational to information intermediation. This perspective broadens our understanding of sell-side analysts as social, rather than solely information, intermediaries and highlights how information asymmetries often have a social basis.