Electronic Thesis and Dissertation Repository


Doctor of Philosophy




Stephen Foerster

2nd Supervisor

Zhichuan Li



This thesis includes three integrated articles in empirical finance and corporate governance.

The first article studies the effects of sell-side financial analysts’ innate ability on corporate insider trading prior to annual earnings announcements from the perspective of information asymmetry. The empirical results show that analysts with higher innate ability are associated with lower level of net buys when insiders have “good” inside information about earnings, but this relation does not hold for net sells when insiders have “bad” inside information. The effects of analysts’ innate ability mostly reside in opportunistic trading rather than routine trading. The tests of analysts’ initial coverage provide stronger effects of analysts’ ability. This article suggests higher analyst ability can restrict insider trading.

The second article explores a broad picture about how different measures of firm size (total assets, total sales, and market capitalization) affect the empirical analysis in 20 prominent areas in corporate finance. This article documents empirical evidence for “measurement effect” in “size effect”. The results show that in most areas of corporate finance, the coefficients of firm size measures are robust in sign and statistical significance. However, the coefficients of regressors other than firm size often change sign and significance when different size measures are employed. In addition, the goodness of fit measured by R-squared also varies with different size measures. As different proxies capture different aspects of “firm size”, the choice of size measures needs both theoretical and empirical justification.

The third article further studies the impact drivers of dissemination of financial research. The empirical results show that the universalist perspective (quality and domain), the social constructivist perspective (visibility and personal promotion), and the presentation perspective (first-page attention and expositional clarity) all provide explanatory power for the impact of papers in the top three finance journals. Specifically, paper quality, research methods, journal placement, and paper age are the most important drivers for the number of citations. In addition, different drivers play different roles for the papers in JF, JFE, and RFS. This article provides evidence for finance scholars, university administrators, and finance journal management who care about research impact.