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Do German security analysts herd?

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Do German security analysts herd? / Aretz, Kevin; Naujoks, M; Kerl, A et al.
In: Financial Markets and Portfolio Management, Vol. 23, No. 1, 03.2009, p. 3-29.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Aretz, K, Naujoks, M, Kerl, A & Walter, A 2009, 'Do German security analysts herd?', Financial Markets and Portfolio Management, vol. 23, no. 1, pp. 3-29. https://doi.org/10.1007/s11408-008-0093-7

APA

Aretz, K., Naujoks, M., Kerl, A., & Walter, A. (2009). Do German security analysts herd? Financial Markets and Portfolio Management, 23(1), 3-29. https://doi.org/10.1007/s11408-008-0093-7

Vancouver

Aretz K, Naujoks M, Kerl A, Walter A. Do German security analysts herd? Financial Markets and Portfolio Management. 2009 Mar;23(1):3-29. doi: 10.1007/s11408-008-0093-7

Author

Aretz, Kevin ; Naujoks, M ; Kerl, A et al. / Do German security analysts herd?. In: Financial Markets and Portfolio Management. 2009 ; Vol. 23, No. 1. pp. 3-29.

Bibtex

@article{2a9a36237ec440c19519470399375a81,
title = "Do German security analysts herd?",
abstract = "We employ an innovative methodology suggested by Bernhardt et al. (J. Financ. Econ. 80:657–675, 2006) to examine the herding (or anti-herding) behavior of German analysts regarding earnings forecasts. This methodology avoids well-known shortcomings often encountered in related studies, such as correlated information signals, unexpected common shocks to earnings, systematic optimism or pessimism, or forecast target mismeasurement. Our findings suggest that German analysts anti-herd, that is, they systematically issue earnings forecasts that are further away from the consensus forecast than their private information indicates. Furthermore, we analyze the association between herding behavior and different characteristics, including the size of the brokerage, general or firm-specific experience, and the coverage of firms on the Neuer Markt. We mainly confirm findings for the United States, for example, that anti-herding is more severe in cases of higher competition among analysts. Contrary to anecdotal evidence, we also find anti-herding behavior in earnings forecasts for Neuer Markt firms during the “new economy” bubble.",
keywords = "Earnings forecasting - Security analysts - Herding behavior - German stock market",
author = "Kevin Aretz and M Naujoks and A Kerl and A Walter",
year = "2009",
month = mar,
doi = "10.1007/s11408-008-0093-7",
language = "English",
volume = "23",
pages = "3--29",
journal = "Financial Markets and Portfolio Management",
issn = "1555-4961",
publisher = "Springer New York",
number = "1",

}

RIS

TY - JOUR

T1 - Do German security analysts herd?

AU - Aretz, Kevin

AU - Naujoks, M

AU - Kerl, A

AU - Walter, A

PY - 2009/3

Y1 - 2009/3

N2 - We employ an innovative methodology suggested by Bernhardt et al. (J. Financ. Econ. 80:657–675, 2006) to examine the herding (or anti-herding) behavior of German analysts regarding earnings forecasts. This methodology avoids well-known shortcomings often encountered in related studies, such as correlated information signals, unexpected common shocks to earnings, systematic optimism or pessimism, or forecast target mismeasurement. Our findings suggest that German analysts anti-herd, that is, they systematically issue earnings forecasts that are further away from the consensus forecast than their private information indicates. Furthermore, we analyze the association between herding behavior and different characteristics, including the size of the brokerage, general or firm-specific experience, and the coverage of firms on the Neuer Markt. We mainly confirm findings for the United States, for example, that anti-herding is more severe in cases of higher competition among analysts. Contrary to anecdotal evidence, we also find anti-herding behavior in earnings forecasts for Neuer Markt firms during the “new economy” bubble.

AB - We employ an innovative methodology suggested by Bernhardt et al. (J. Financ. Econ. 80:657–675, 2006) to examine the herding (or anti-herding) behavior of German analysts regarding earnings forecasts. This methodology avoids well-known shortcomings often encountered in related studies, such as correlated information signals, unexpected common shocks to earnings, systematic optimism or pessimism, or forecast target mismeasurement. Our findings suggest that German analysts anti-herd, that is, they systematically issue earnings forecasts that are further away from the consensus forecast than their private information indicates. Furthermore, we analyze the association between herding behavior and different characteristics, including the size of the brokerage, general or firm-specific experience, and the coverage of firms on the Neuer Markt. We mainly confirm findings for the United States, for example, that anti-herding is more severe in cases of higher competition among analysts. Contrary to anecdotal evidence, we also find anti-herding behavior in earnings forecasts for Neuer Markt firms during the “new economy” bubble.

KW - Earnings forecasting - Security analysts - Herding behavior - German stock market

U2 - 10.1007/s11408-008-0093-7

DO - 10.1007/s11408-008-0093-7

M3 - Journal article

VL - 23

SP - 3

EP - 29

JO - Financial Markets and Portfolio Management

JF - Financial Markets and Portfolio Management

SN - 1555-4961

IS - 1

ER -