Effects of managerial overconfidence on analyst recommendations

Mei-Chen Lin (), Po-Hsin Ho () and Hsiang-Lin Chih ()
Additional contact information
Mei-Chen Lin: National Taipei University
Po-Hsin Ho: National Taipei University
Hsiang-Lin Chih: National Taipei University

Review of Quantitative Finance and Accounting, 2019, vol. 53, issue 1, No 3, 73-99

Abstract: Abstract This study investigates the relation between managerial overconfidence and analyst recommendations. The empirical finding shows that analysts are less likely to issue upgrade recommendations for firms managed by overconfident CEOs. Similarly, analysts spend a longer time to upgrade stocks associated with overconfident CEOs. The effect of CEO overconfidence on recommendation revisions is non-monotonic. Analysts are more reluctant to upgrade firms with highly-overconfident CEOs. More experienced analysts are less susceptible to managerial overconfidence. Moreover, investors exhibit stronger response to recommendations for firms with overconfident CEOs.

Keywords: Analyst recommendation; Managerial overconfidence; Analyst experience (search for similar items in EconPapers)
JEL-codes: G10 G11 G40 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1007/s11156-018-0743-4 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:rqfnac:v:53:y:2019:i:1:d:10.1007_s11156-018-0743-4

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/11156/PS2

DOI: 10.1007/s11156-018-0743-4

Access Statistics for this article

Review of Quantitative Finance and Accounting is currently edited by Cheng-Few Lee

More articles in Review of Quantitative Finance and Accounting from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().