We would like to invite you to participate in Management Engineering (ME) Seminar.
1. When: September 26th (Thursday), 16:00 ~ 17:30
2. Where: Building 9 7th, Lecture Room 9701
3. Speaker: Prof. Myungkyu Shim (Yonsei University)
4. Topic: Do Financial Analyst Herd?
5. Research field: Managerial Economics
* Language: Korean
[Abstract] Financial analysts may have strategic incentives to herd or to anti-herd when issuing
forecasts of firms' earnings. This paper develops and implements a new test to examine
whether such incentives exist and to identify the form of strategic behavior. We use
the equilibrium property of the finite-player forecasting game of Kim and Shim (2019)
that forecast dispersion decreases as the number of forecasters increases if and only
if there is strategic complementarity in their forecasts. We find strong evidence that
supports strategic herding behavior of financial analysts. This finding is robust to
different forecast horizons and sequential forecast release.