Star power: A quasi-natural experiment on how analyst status affects recommendation performance

Baoqiang Zhan and Chong Wu

Finance Research Letters, 2024, vol. 59, issue C

Abstract: We investigate the impact of analyst status on recommendation performance. Using 281,886 analyst recommendations from Chinese stock markets from 2007 to 2022, we employ a quasi-experiment approach by leveraging the star analyst election and utilize a time-varying difference-in-differences model to examine the difference in cumulative abnormal returns resulting from analyst recommendations before and after the election. Our findings reveal that when analysts are promoted to star status, the stocks they recommend exhibit improved performance. Interestingly, the star effect is particularly pronounced for analysts working in small brokerage firms and persists even during the economic shocks.

Keywords: Analyst status; Recommendation performance; Analyst reports; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: G10 G14 G24 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612323011649
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011649

DOI: 10.1016/j.frl.2023.104792

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().