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Another look at the holiday effect: evidence from sell-side analysts’ forecasts

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  • Liu, Zheng
  • Liu, Yingfei
  • Gu, Qiankun
  • Wang, Huiqiang

Abstract

This paper tests whether and how sell-side financial analysts in the United States react to the holidays of their countries of origin. Based on these holiday identifiers, we find that analysts’ forecasts are less biased before these holidays, but shortly after these holidays, analysts’ forecasts are more accurate, and recommendations are related to more market reactions. These results are robust to control for January/December, and Monday/Friday effect. The accuracy effect is also robust to alternative measurements. We further show that the relationship is more pronounced in the subsample of male analysts, analysts whose highest degree is a bachelor’s, follower analysts, and analysts who do not graduate from the top ten universities. In addition, we show that the association mainly exists in large size firms and firms with stable operations. Lastly, we show that our results are robust to alternative cultural elements, including social trust, hierarchy, and individualism.

Suggested Citation

  • Liu, Zheng & Liu, Yingfei & Gu, Qiankun & Wang, Huiqiang, 2025. "Another look at the holiday effect: evidence from sell-side analysts’ forecasts," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 351-382.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:351-382
    DOI: 10.1016/j.eap.2025.06.008
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