Loss of credit means loss of market share.

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Companies lose market share when they do not have enough access to the capital they need to compete, maintains a study from the University of Iowa, Iowa City. Researchers found this link between financial and consumer markets by discovering that, when financial analysts at brokerage houses stop following publicly traded firms, those firms lose market share. With less information from analysts, financial markets are less likely to provide those firms with access to capital, and without capital, better-financed competitors can undercut the firms' prices and take away market share.

"Firms that lost an analyst subsequently lost market share over the next couple of years," says Jon Garfinkel, professor of finance. 'The reports these analysts write are vital to investors, who use the information to help them decide whether to provide capital financing to firms. If less information is available, they may not feel they are getting a full picture of the firm and decide to not provide financing."

So, when, for instance, Morgan Stanley merged with Dean Witter Reynolds in 1997, layoffs meant 13 fewer...