@article{3bc3ab5ba36544f29de4170d6fd58df0,
title = "Market segmentation and differential reactions of local and foreign investors to analyst recommendations",
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.",
author = "Chunxin Jia and Yaping Wang and Wei Xiong",
note = "Funding Information: We would like to thank Snehal Banerjee, Feng Li, Roger Loh, Christopher Parsons, Jun Qian, Nancy Qian, Paola Sapienza, Andrei Shleifer, Rene Stulz, and Luigi Zingales and the seminar participants at American Economic Association Meetings, CKGSB, Hong Kong University, Mitsui Finance Symposium at University of Michigan, NBER Behavioral Finance Meeting, NBER Conference on Chinese Economy, Peking University, SAC, Stanford China Conference, and Tulane for helpful comments and encouragement. We are particularly grateful to Robin Greenwood (the editor) and two anonymous referees for numerous constructive comments and suggestions. Chunxin Jia and Yaping Wang acknowledge financial support from Natural Science Foundation of China (71673006 and 71272037). Please send correspondence to Wei Xiong, Bendheim Center for Finance, Princeton University, Princeton, NJ 08540; telephone: 609-258-0282. E-mail: wxiong@princeton.edu. Publisher Copyright: {\textcopyright} The Author 2017. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved.",
year = "2017",
month = sep,
day = "1",
doi = "10.1093/rfs/hhx010",
language = "English (US)",
volume = "30",
pages = "2972--3008",
journal = "Review of Financial Studies",
issn = "0893-9454",
publisher = "Oxford University Press",
number = "9",
}