Market segmentation and differential reactions of local and foreign investors to analyst recommendations

Chunxin Jia, Yaping Wang, Wei Xiong

Research output: Contribution to journalArticle

14 Scopus citations

Abstract

This paper uses segmented dual-class shares of Chinese firms-Ashares traded in mainland China by local investors and H shares traded in Hong Kong by foreign investors-to document a rich pattern in the differential reactions of local and foreign investors to analyst recommendations. This pattern reveals that social connections between analysts and investors affect investor reactions to analyst recommendations. Because of the investors' differential reactions, analyst recommendations may exacerbate, rather than attenuate, the market segmentation between the two share classes.

Original languageEnglish (US)
Pages (from-to)2972-3008
Number of pages37
JournalReview of Financial Studies
Volume30
Issue number9
DOIs
StatePublished - Sep 1 2017

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Market segmentation and differential reactions of local and foreign investors to analyst recommendations'. Together they form a unique fingerprint.

  • Cite this