The Effects of Analysts’ Herding on Traders: Evidence from the Taiwan Stock Market

Po-Jung Chen ()
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Po-Jung Chen: I-Shou University

Asia-Pacific Financial Markets, 2016, vol. 23, issue 2, No 4, 203-227

Abstract: Abstract The primary aim of this study is to carry out an investigation into the effects of analysts’ herding on different types of traders in Taiwan stock market. Our empirical results reveal that smaller traders are more readily affected by analyst herding, essentially as a result of their lack of experience and their lack of access to relevant information sources, which leads to them reacting directly to the central point of the recommendations made by the analysts. Our findings also reveal that both small and large traders are affected by analyst herding in the recommendations provided by the analysts relating specifically to buying. As for the evidence on analyst herding in recommendations relating to selling, larger traders are invariably found to have made use of their informational advantages to act in advance of such recommendations.

Keywords: Herding; Analysts; Stock recommendations; Abnormal trading volume; Brokers (search for similar items in EconPapers)
JEL-codes: G11 G12 G24 G28 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10690-016-9216-8

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