Industry experience makes Wall Street analysts better watchdogs of corporate executives, according to a new study. Illustration: Jon Krause for The Wall Street JournalIs having industry experience good or bad for a Wall Street analyst? This is the “effective-monitor hypothesis.”But the opposing “impaired-monitor hypothesis” says industry experience could make the analyst too sympathetic or, worse, leave a trail of personal contacts that could undermine the gadfly function. The study used a database of Wall Street analysts’ reports and profiles from LinkedIn. Photo: Michael Nagle/Bloomberg NewsThe study also found industry-experienced analysts 31% more likely than other analysts to examine corporate governance issues in their reports.

Source: Wall Street Journal June 05, 2017 02:05 UTC