Do Analysts Herd? An Analysis of Recommendations and Market Reactions

• 成果类型: Article
• 署名作者: Jegadeesh, Narasimhan; Kim, Woojin
• 署名单位: Emory University; National Bureau of Economic Research; Korea University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp093
• 发表日期: 2010
• 页码: 901
• 关键词: FORECAST REVISIONS; career concerns; BEHAVIOR

摘要

This article develops and implements a new test to investigate whether sell-side analysts herd around the consensus when they make stock recommendations. Our empirical results support the herding hypothesis. Stock price reactions following recommendation revisions are stronger when the new recommendation is away from the consensus than when it is closer to it, indicating that the market recognizes analysts' tendency to herd. We find that analysts from larger brokerages, analysts following stocks with smaller dispersion across recommendations, and analysts who make less frequent revisions are more likely to herd. (JEL G14, G20, D82, D83)