An analyst by any other surname: Surname favorability and market reaction to analyst forecasts

Jay Heon Jung; Alok Kumar; Sonya S. Lim; Choong Yuel Yoo

doi:10.1016/j.jacceco.2019.02.002

An analyst by any other surname: Surname favorability and market reaction to analyst forecasts

Jay Heon Jung, Alok Kumar, Sonya S. Lim, Choong Yuel Yoo

Finance

Research output: Contribution to journal › Article

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	https://doi.org/10.1016/j.jacceco.2019.02.002
State	Published - Jan 1 2019

Keywords

Earnings forecast
Equity analyst
Market reaction
Motivated reasoning
Surname favorability

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

Access to Document

10.1016/j.jacceco.2019.02.002

Fingerprint Dive into the research topics of 'An analyst by any other surname: Surname favorability and market reaction to analyst forecasts'. Together they form a unique fingerprint.

Cite this

Jung, J. H., Kumar, A., Lim, S. S., & Yoo, C. Y. (2019). An analyst by any other surname: Surname favorability and market reaction to analyst forecasts. Journal of Accounting and Economics. https://doi.org/10.1016/j.jacceco.2019.02.002

@article{cacdd1f595ff42b78312a72b39791566,

title = "An analyst by any other surname: Surname favorability and market reaction to analyst forecasts",

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{\textquoteright} 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.",

keywords = "Earnings forecast, Equity analyst, Market reaction, Motivated reasoning, Surname favorability",

author = "Jung, {Jay Heon} and Alok Kumar and Lim, {Sonya S.} and Yoo, {Choong Yuel}",

year = "2019",

month = jan,

day = "1",

doi = "10.1016/j.jacceco.2019.02.002",

language = "English (US)",

journal = "Journal of Accounting and Economics",

issn = "0165-4101",

publisher = "Elsevier",

}

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 -