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emerging/innovative research session

    Judy K Beckman
    Mimicking and Herding Behaviors among U.S. Investment...
    emerging/innovative research session posted July 28, 2014 by Judy K Beckman 
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    title:
    Mimicking and Herding Behaviors among U.S. Investment Analysts: Implications for Market Reactions to Actual Earnings Announcements
    author(s), affiliation(s):
    Judy K. Beckman, University of Rhode Island; Liem Nguyen, Westfield State University; Henry Oppenheimer, University of Rhod Island
    session description:

    Research paper poster session. 

    abstract:

    Mimicking (herding) occurs when an analyst sets a forecast within one cent of a prior
    management earnings guidance (first analyst forecast). Analysts are less likely to mimic
    management guidance for growth firms, loss firms and firms with high potential litigation costs.
    When the first reporting analyst mimics, following analysts are less likely to herd. Analysts are
    less likely to mimic management guidance under Regulation Fair Disclosure but are more likely
    to herd together after the Regulation FD implementation. Markets react less intensively to
    extreme errors in actual earnings announcements after observing analysts’ prior herding behavior
    during the most recent management earnings guidance event. These findings have implications
    for all research using analysts’ forecasts to proxy for market expectations and, in particular, for
    research on extreme earnings surprises and the post-earnings announcement drift.