IFRS and Market Reactions to Analyst Stock Recommendations: Evidence from Korea

Global Business and Finance Review

Kyoungwon Mo¹  Kyunbeom Jeong²  Induck Hwang³ 

[1] Chung-Ang University, Seoul, Republic of Korea;Hansung University, Seoul, Republic of Korea;Keimyung University, Daegu, Republic of Korea;

关键词: ifrs;    analyst stock recommendation;    market reaction;    corporate information environment;   

DOI  :  10.17549/gbfr.2017.22.1.91

来源: DOAJ

【 摘 要 】

We examine changes in both short-term and long-term market reactions to financial analysts’ stock recommendations around the time of IFRS adoption. If the adoption of IFRS improves the corporate-information environment, thereby diminishing the role of the analyst as a generator of information, investors will become less dependent on analyst recommendations; thus, market reactions to analysts’ stock recommendations will decrease. However, if the corporate-information environment deteriorates after the adoption of IFRS, investors will become more dependent on information from intermediaries, such as financial analysts; thus, market reactions to analysts’ stock recommendations will increase. Based on observations of South Korean companies, we find that short-term market reactions to analysts’ stock recommendations diminish after the adoption of IFRS but fail to find a decrease in long-term market reactions to analysts’ stock recommendations after the adoption of IFRS. Our results suggest that IFRS enhances the corporate-information environment and, therefore, that investors rely less on financial analysts’ recommendations after the adoption of IFRS.

【 授权许可】

Unknown