Dr Jason Sturgess, Kellstadt Graduate School of Business, DePaul University
We study the effect of information sharing and spillovers within organisations on individual productivity in the context of financial analysts. Using real firm mergers as a natural experiment we examine how exogenous variation in coverage of the target firm prior to the merger affects post merger performance for the analyst following the acquirer. We provide evidence that performance, measured as forecast error, decreases around the merger, but the decrease is lower when the analyst’s own brokerage also covers the target firm consistent with information spillovers affecting individual productivity. The effects of information spillovers are stronger when analysts share the same geographical location, when peers are of a greater quality, and for related mergers, but are lower when there are greater coordination costs. We further show that analysts perform better when they cover both the acquirer and target prior to the merger. The findings suggest that human capital is portable but also that information spillovers within an organisation might explain individual performance in knowledge-based industries, such as the financial industry.
Dr Jason Sturgess is an Assistant Professor of Finance at the Kellstadt Graduate School of Business, DePaul University and was previously Assistant Professor of Finance at McDonough School of Business, Georgetown University. His research lies in the boundaries of corporate finance, corporate governance, financial intermediation, and organisational economics. Most recently, his work has focused on understanding better how banks make lending decisions which in turn affect the real economy via firm-level investment and financing constraints. Additionally, some new work examines the role of information in decision-making by financial experts such as financial analysts and bank loan managers. His work on corporate governance focuses on the role of monitors, such as institutional investors or lawyers; and also on establishing the value of shareholder democracy through identifying the value of the vote. Finally, his work on corporate investment policy attempts to understand determinants of corporate investments. Jason’s work has been published in the Journal of Finance, the Review of Finance and the Journal of Corporate Finance, has been awarded an Institute for Quantitative Research in Finance (the Q Group) research grant, and has won best paper awards at the Financial Management Association, Mid-West Finance Association, and Spanish Finance Association Annual Meetings. He regularly presents work at international conferences including the annual meetings of the American Finance Association, Western Finance Association, European Finance Association, SFS Cavalcade, Utah Winter Finance Conference, UBC Winter Finance Conference, and Financial Management Association.