Do Sell-Side Analysts Provide More Information Following Debt Covenant Violations? Rixing Lou 10.25394/PGS.12631928.v1 https://hammer.purdue.edu/articles/thesis/Do_Sell-Side_Analysts_Provide_More_Information_Following_Debt_Covenant_Violations_/12631928 This study examines whether financial analysts produce larger amounts of research output and whether their research is more valuable for investors following a debt covenant violation (DCV, hereafter). After a DCV, investor uncertainty about firm value and information asymmetry among stakeholders likely increases. It is therefore difficult for investors to assess firm prospects, resulting in increased demand for firm-specific information. Sell-side analysts, as sophisticated information intermediaries, are skilled at gathering and processing information; thus they are well-suited to provide more research output in response to increased investor demand. I predict and find that equity analysts provide a larger amount of research, proxied by recommendation revisions and earnings forecast revisions, after a DCV. I also document an incremental association between a DCV and analyst research production for firms with less financial flexibility, firms with low institutional ownership, and firms covered by more experienced analysts. In addition, I find evidence that analyst research becomes more valuable and that uncertainty-adjusted analyst forecast errors decrease following a DCV. These results suggest that a change in a firm’s information environment associated with a DCV has significant influence on investors and equity analysts besides the economic consequences documented in prior literature. 2020-07-09 17:14:26 debt covenant violation sell-side analyst uncertainty information asymmetry Financial Accounting