Market reaction to analyst forecasts by analysts with familyship: Evidence from South Korea

Kyoungwon Mo, Wonsuk Ha and Kyung-Jin Park

Finance Research Letters, 2023, vol. 55, issue PB

Abstract: Using the surnames of financial analysts in Korea, this paper examines how investors react to forecasts of analysts with familyship. Since Korea has a strong family-centered culture of sharing the surname, it provides a suitable setting for examining whether investors incorporate analysts’ personal characteristics into their decision-making. This paper finds that stock recommendations by analysts with familyship elicit stronger market reactions. Additionally, the effect is only observed in the cases of upgrade, hold, and buy recommendations. Finally, the effect is observed only when the stock market was not in recession.

Keywords: Equity analysts; Familyship; Korean surname; Market reaction; Motivated reasoning (search for similar items in EconPapers)
JEL-codes: G14 G24 G40 J10 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pb:s154461232300315x

DOI: 10.1016/j.frl.2023.103943

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