Journal of Management & Governance

, Volume 22, Issue 1, pp 55–88 | Cite as

Product market competition and analyst following

  • Syrine Sassi
  • Narjess Toumi


In this study, we investigate the link between product market competition and the extent of a firm’s analyst following. Our research is motivated by prior studies on analyst coverage, as well as the literature pertaining to the informational and monitoring role of product market competition. Using a sample of 520 French listed firms over 2000–2013, we find support to the hypothesis that the number of analysts following a firm decreases with the intensification of competition. This result suggests that the disciplinary power of product market competition makes investors more confident that firms are well monitored, which reduces their incentives to seek additional private information produced by financial analysts. In short, our findings corroborate previous evidence that there is a substitution effect between competition and other external corporate governance mechanisms, especially analyst following. Our results also shed more light on how the quality of firms’ monitoring mechanisms and information environment is affected by the intensity of product market competition.


Analyst following Product market competition Corporate governance Information asymmetry 


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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.IRGUniversité Paris Est CréteilCréteilFrance

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