Abstract
We find that forecast revisions by analysts with more favorable surnames elicit stronger market reactions. The effect is stronger among firms with lower institutional ownership and for analysts with non-American first names. Following the 9/11 terrorist attacks, and France and Germany's opposition to the Iraq War, revisions by analysts with Middle Eastern and French or German surnames, respectively, generated weaker market reaction. Surname favorability is not associated with forecast quality, but it has complementary effects with forecast performance on analysts’ career outcomes. Surname favorability mitigates under-reaction to forecast revisions. These findings are distinct from the effects of ethnic, cultural proximity, or in-group bias.
| Original language | English (US) |
|---|---|
| Journal | Journal of Accounting and Economics |
| DOIs | |
| State | Published - Jan 1 2019 |
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Keywords
- Earnings forecast
- Equity analyst
- Market reaction
- Motivated reasoning
- Surname favorability
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
Cite this
An analyst by any other surname : Surname favorability and market reaction to analyst forecasts. / Jung, Jay Heon; Kumar, Alok; Lim, Sonya S.; Yoo, Choong Yuel.
In: Journal of Accounting and Economics, 01.01.2019.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - An analyst by any other surname
T2 - Surname favorability and market reaction to analyst forecasts
AU - Jung, Jay Heon
AU - Kumar, Alok
AU - Lim, Sonya S.
AU - Yoo, Choong Yuel
PY - 2019/1/1
Y1 - 2019/1/1
N2 - We find that forecast revisions by analysts with more favorable surnames elicit stronger market reactions. The effect is stronger among firms with lower institutional ownership and for analysts with non-American first names. Following the 9/11 terrorist attacks, and France and Germany's opposition to the Iraq War, revisions by analysts with Middle Eastern and French or German surnames, respectively, generated weaker market reaction. Surname favorability is not associated with forecast quality, but it has complementary effects with forecast performance on analysts’ career outcomes. Surname favorability mitigates under-reaction to forecast revisions. These findings are distinct from the effects of ethnic, cultural proximity, or in-group bias.
AB - We find that forecast revisions by analysts with more favorable surnames elicit stronger market reactions. The effect is stronger among firms with lower institutional ownership and for analysts with non-American first names. Following the 9/11 terrorist attacks, and France and Germany's opposition to the Iraq War, revisions by analysts with Middle Eastern and French or German surnames, respectively, generated weaker market reaction. Surname favorability is not associated with forecast quality, but it has complementary effects with forecast performance on analysts’ career outcomes. Surname favorability mitigates under-reaction to forecast revisions. These findings are distinct from the effects of ethnic, cultural proximity, or in-group bias.
KW - Earnings forecast
KW - Equity analyst
KW - Market reaction
KW - Motivated reasoning
KW - Surname favorability
UR - http://www.scopus.com/inward/record.url?scp=85062601832&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85062601832&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2019.02.002
DO - 10.1016/j.jacceco.2019.02.002
M3 - Article
AN - SCOPUS:85062601832
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
ER -