The Effects Of Analyst Characteristics And Regulation On Trade Generation For Brokerage Firms
Source: Georgia Tech
This paper examines the stability and determinants of equity trading market share for U.S. brokerage firms over the period 1996 through 2004. Using brokerage house market share as a proxy for trade generation, they find significant annual variations in brokerage market share at the firm level. Analyst recommendation activity, the presence of an all-star analyst, and an investment banking affiliation with the firm are positively associated with brokerage market share. On average, gaining an investment banking client adds 2.3 percent (3.2 percent) to a top (non-top) brokerage firm's market share of trading in that stock.