In-group bias in financial markets

DOI:	https://doi.org/10.2139/ssrn.2884218
URL:	https://ssrn.com/abstract=2884218
Dokumenttyp:	Arbeitspapier
Erscheinungsjahr:	2018
Titel einer Zeitschrift oder einer Reihe:	SSRN Working Paper Series
Ort der Veröffentlichung:	Rochester, NY
Auflage:	Revised
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Fakultät für Betriebswirtschaftslehre > ABWL u. Corporate Governance (Niessen-Ruenzi 2012-)
Fachgebiet:	330 Wirtschaft
Abstract:	This paper investigates in-group bias in financial markets. Specifically, we argue that equity analysts may have less favorable opinions about firms that are not headed by CEOs of their own “group”. We define groups based on gender, ethnicity and political attitudes. Examining analysts’ earnings forecasts, we find that male analysts have lower assessments of firms headed by female CEOs than of firms headed by male CEOs. Results are very similar if in-groups are defined based on ethnicity or political attitudes: Earnings forecasts of domestic analysts are lower for firms headed by foreign CEOs and earnings forecasts of Republican analysts are lower for firms headed by Democrat CEOs. As a result, earnings surprises of firms headed by female, foreign, or Democrat CEOs are systematically upward biased. Overall, our results provide robust evidence for in-group bias in financial markets.

Dieser Eintrag ist Teil der Universitätsbibliographie.

BASE: Jannati, Sima ; Kumar, Alok ; Niessen-Ruenzi, Alexandra ; Wolfers, Justin

Google Scholar: Jannati, Sima ; Kumar, Alok ; Niessen-Ruenzi, Alexandra ; Wolfers, Justin

ORCID: Jannati, Sima, Kumar, Alok, Niessen-Ruenzi, Alexandra

and Wolfers, Justin

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