The equity broker’s dilemma: An ethnographic inquiry into reverse brokering
(English)Manuscript (preprint) (Other academic)
This study addresses the overlooked equity sales function and how the contrarianism of equity brokers contributes to market activity. Based on an ethnographic study of an equity sales desk, we follow how the brokers in question developed an investment case and how they managed their personal involvement in it. Drawing on actor-network theory, this study advances the notion of the “equity broker’s dilemma”, which implies that without others’ support for the investment case, its economic potential will not be realized. However, as the number of supporters rises, the brokers also run the risk of not being rewarded and their contributions are therefore at risk. In relation to this equity broker’s dilemma, this study finds a use of accounting based on interactions with clients rather than with analysts, a practice referred to as “reverse brokering”. This process requires information that is varied, temporary, and generalized to other cases as the brokers’ propositions are displaced. The brokers’ use of accounting is based on marking distance towards the consensus on specific items only, limiting their overall risk exposure yet maximizing their conviction towards selected accounting items. This use of accounting is thus driven by the attribution of responsibility as the case materializes and an escape of any blame when it fails.
Accounting, Actor-network theory, Brokers, Equity investments, Ethnography
Research subject Business Administration
IdentifiersURN: urn:nbn:se:su:diva-133281OAI: oai:DiVA.org:su-133281DiVA: diva2:958025