Who was informative? Performance of foreign and local analysts’ stock recommendations during the Asian financial crisis
AbstractThis paper examines the performance of foreign and local analysts’ stock recommendations in Indonesia, Malaysia, Thailand, and South Korea during the financial crisis of 1997–1998. Unlike most of the prior studies, our results provide strong evidence that neither of the two groups held a complete information advantage over the other during the period of crisis. Using a large dataset of analysts’ recommendations, we show that foreign analysts’ buy recommendations were more informative than local analysts’ buy recommendations, while the opposite held for sell recommendations, i.e. local analysts’ sell recommendations were more informative than foreign analysts’ sell recommendations. Our results provide evidence that neither of the frequently advanced explanations regarding relative performance of foreign and local analysts hold during the period of extreme uncertainty.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in International Business and Finance.
Volume (Year): 29 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/ribaf
Asian financial crisis; Analyst recommendations; Foreign analysts; Local analysts; Performance; Information advantage;
Find related papers by JEL classification:
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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