MANAGEMENT COMMUNICATIONS WITH SECURITIES ANALYSTS

This paper examines the benefits from communications made at corporate presentations to securities analysts. We examine whether firms benefi t by increasing analyst following or by correcting mispricing, and whe ther analysts gain by acquiring information that improves the frequenc y or quality of their forecasts, The results show significant increase s in analyst following, and significantly positive abnormal returns on the presentation date, with larger reactions observed for underpriced securities, Finally, although we find an increase in forecasting acti vity following the presentations, we find no evidence that analysts' p ost-presentation forecasts are less disperse, more accurate or less bi ased than their pre-presentation forecasts. (C) 1997 Elsevier Science B.V. All rights reserved.