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Social learning and analyst behavior
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Kumar, Alok, Rantala, Ville and Xu, Rosy (2022) Social learning and analyst behavior. Journal of Financial Economics, 143 (1). pp. 434-461. doi:10.1016/j.jfineco.2021.06.011 ISSN 0304-405X.
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Official URL: https://doi.org/10.1016/j.jfineco.2021.06.011
Abstract
This study examines whether sell-side equity analysts engage in “social learning” in which their earnings forecasts for certain firms are influenced by the forecasts and outcomes of “peer” analysts associated with other firms in their respective portfolios. We find that analyst optimism is negatively correlated with recent forecast errors, by peers, on other firms in the analyst's portfolio. An analyst is also more likely to issue “bold” forecasts when peers recently issued similar forecasts for other portfolio firms. Analysts learn more from peers with similar personal characteristics. Overall, social learning benefits analysts and improves their forecast accuracy.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HG Finance | ||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
Library of Congress Subject Headings (LCSH): | Stockbrokers, Investment advisors, Stock price forecasting, Social learning | ||||||||
Journal or Publication Title: | Journal of Financial Economics | ||||||||
Publisher: | Elsevier Science BV | ||||||||
ISSN: | 0304-405X | ||||||||
Official Date: | January 2022 | ||||||||
Dates: |
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Volume: | 143 | ||||||||
Number: | 1 | ||||||||
Page Range: | pp. 434-461 | ||||||||
DOI: | 10.1016/j.jfineco.2021.06.011 | ||||||||
Institution: | University of Warwick | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 9 March 2021 | ||||||||
Date of first compliant Open Access: | 15 December 2022 | ||||||||
Related URLs: | |||||||||
Open Access Version: |
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