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Google searches around analyst recommendation revision announcements: Evidence from the Taiwan stock market

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  • Wu, Ming-Hung
  • Tsai, Wei-Che
  • Lu, Chia-Chi
  • Zhang, Hang

Abstract

We investigate the impact of Google search volume on stock prices and trading volume around recommendation revision announcements made by securities firms in the Taiwan stock market. Our results reveal that for upgrade announcements, the internet searches that are driven by investor attention lead to a temporary increase in positive price pressure around the revision announcements, whereas the price effect of the information extracted from the Google searches is persistent. We also find that trading volume reflects the incoming news around the revision announcements. Our results suggest that individual investors, who receive analyst revision reports gratis from securities firms before these reports are made public, will search through the Internet to obtain valid firm-specific information relating to the recommendation revisions.

Suggested Citation

  • Wu, Ming-Hung & Tsai, Wei-Che & Lu, Chia-Chi & Zhang, Hang, 2022. "Google searches around analyst recommendation revision announcements: Evidence from the Taiwan stock market," International Review of Economics & Finance, Elsevier, vol. 81(C), pages 75-97.
  • Handle: RePEc:eee:reveco:v:81:y:2022:i:c:p:75-97
    DOI: 10.1016/j.iref.2022.04.005
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    More about this item

    Keywords

    Investor attention; Internet search; Information demand; Recommendation revision announcements;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G40 - Financial Economics - - Behavioral Finance - - - General

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