Star analyst activities and stock price synchronicity: Korean equity market reforms

Karam Kim, Doojin Ryu and Jinyoung Yu

Emerging Markets Review, 2024, vol. 61, issue C

Abstract: This study examines whether analysts' informativeness and activities change following regulatory reforms strengthening market surveillance in Korea. Only star analysts provide firm-specific information, particularly for firms with characteristics favored by fund managers. However, such information provision is only significant before the equity market reforms. After the reforms, star analysts tend to cover more financially stable firms with larger sizes, higher earnings, higher stock liquidity, and lower leverage. Difference-in-differences analyses confirm that the synchronicity of chaebol firms with brokerage firms is lower than those without brokerages, indicating that the reforms' effect is mitigated for those with chaebol-affiliated analysts.

Keywords: Analyst coverage; Chaebol; Firm-specific information; Market reform; Star analyst; Stock price synchronicity (search for similar items in EconPapers)
JEL-codes: G12 G14 G38 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:61:y:2024:i:c:s1566014124000438

DOI: 10.1016/j.ememar.2024.101148

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