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Publication date: 4 April 2024

Chia-Wei Huang, Chih-Yen Lin and Chin-Te Yu

Findings in the literature indicate leading financial analysts attract high levels of market attention and provide more accurate earnings forecasts prior to becoming all-star…

Abstract

Findings in the literature indicate leading financial analysts attract high levels of market attention and provide more accurate earnings forecasts prior to becoming all-star analysts. Furthermore, these analysts significantly impact the investment decisions of other market participants and thus the market price of assets. Therefore, this study examines the information role of leading financial analysts and identifies two significant conclusions. First, the positive outcomes of these analyst leaders are more informative and attract more followers. Second, informational herding by followers of these analysts is not as naïve as suggested in previous studies, as followers who smartly use information from analyst leaders tend to perform better. We also find that analysts who practice smart learning by studying and selectively employing analyst-leader decisions achieve better career outcomes.

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Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83753-865-2

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