In a recent paper titled "Analyst Research Quality and the JOBS Act: Effects of Increased Pre-IPO Communication" Michael Dambra (University of Buffalo), and Laura Field, Matthew Gufstafson, and Kevin Pisciotta (Penn State University) examine the effect of the JOBS Act on equity research. The paper concludes that the JOBS Act "increases permissible pre-IPO interactions between research analysts and investors, investment bankers, and management." It is not clear from the paper how or why the interactions have changed. The authors conclude that in the post-JOBS Act period, research distributed by analysts affiliated with the IPO underwriters has become less accurate and more optimistic relative to their unaffiliated counterparts. Post-JOBS, affiliated reports are also accompanied by muted market reactions and larger price increases prior to the end of the quiet period when most affiliated analysts initiate coverage. The paper may be downloaded here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2530109.
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