Stigma and Political Ideology of Financial Analysts

Mohammad Sadri, Ali Mohammadi, Pooyan M. Khashabi

Research output: Contribution to conferencePaperResearchpeer-review


Scholars have examined the magnitude of economic loss that a stigmatized organization suffers by studying the effect of stigma on the firm's stock market valuations. However, the microfoundations of such negative relationship - through financial analysts’ recommendations and the heterogeneity of their response - has not been investigated. This study investigates the effect of stigma on analysts’ sell recommendations by examining the role of analysts’ political ideology in this relationship. Using annual analysts' recommendations for U.S. defense firms between 1998 and 2017 and a novel database of analysts’ political ideology, we find that liberal-leaning analysts are more likely to issue sell recommendations for stigmatized firms, particularly when the stigma is related to social harm and when the President is from the Democratic party.
Original languageEnglish
Publication date2023
Number of pages32
Publication statusPublished - 2023
EventDRUID23 Conference - NOVA School of Business and Economics, Lisbon, Portugal
Duration: 10 Jun 202312 Jun 2023
Conference number: 44


ConferenceDRUID23 Conference
LocationNOVA School of Business and Economics
Internet address

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