Who to trust? Reactions to analyst recommendations of domestic versus foreign brokerage houses in a developing stock market

Murat Tiniç, Başak Tanyeri and Mehmet Bodur

Finance Research Letters, 2021, vol. 43, issue C

Abstract: Announcement day abnormal returns around analyst recommendations of upgrades average 35 and downgrades average -45 basis points in Borsa Istanbul. The nationality of the investment bank issuing the recommendation affects the magnitude of the stock market reaction. The absolute magnitude of abnormal returns upon upgrade and downgrade recommendations of foreign investment banks is larger than that of local investment banks. The differential reaction indicates that in a developing market country, Turkey, investors pay closer attention when the source of information is foreign rather than local.

Keywords: Information transmission; Analyst recommendations; Brokerage houses; Market response, Event study (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:43:y:2021:i:c:s1544612321000313

DOI: 10.1016/j.frl.2021.101950

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