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The First- and Second-Hand Effect of Analysts' Stock Recommendations - Evidence from the Swiss Stock Market
Journal
European Financial Management
ISSN
1354-7798
ISSN-Digital
1468-036X
Type
journal article
Date Issued
2008-11-01
Author(s)
Abstract
This paper empirically investigates the impact of both the first release of analysts' stock recommendations to a limited clientele and the subsequent dissemination of the same information in a major newspaper to a broader audience. For a sample of 1460 stock recommendations published in FuW, Switzerland's major financial newspaper, significant positive abnormal returns on the day of the original release of buy recommendations and on the day of publication in FuW are documented. Tests of the price pressure and information hypotheses reveal that analysts' recommendations contain some new information, which is quickly incorporated in the stock prices on the first release of this information. In contrast, the statistically significant announcement effects associated with the publication of already known information can be primarily ascribed to price pressure in the underlying securities.
Language
English
Keywords
Stock recommendations
Second-hand information
Analysts
Price pressure and information hypotheses
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Blackwell
Publisher place
Oxford
Volume
14
Number
5
Start page
962
End page
988
Pages
27
Subject(s)
Division(s)
Eprints ID
210181