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Star analyst activities and stock price synchronicity: Korean equity market reforms

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  • Kim, Karam
  • Ryu, Doojin
  • Yu, Jinyoung

Abstract

This study examines whether analysts' informativeness and activities change following regulatory reforms strengthening market surveillance in Korea. Only star analysts provide firm-specific information, particularly for firms with characteristics favored by fund managers. However, such information provision is only significant before the equity market reforms. After the reforms, star analysts tend to cover more financially stable firms with larger sizes, higher earnings, higher stock liquidity, and lower leverage. Difference-in-differences analyses confirm that the synchronicity of chaebol firms with brokerage firms is lower than those without brokerages, indicating that the reforms' effect is mitigated for those with chaebol-affiliated analysts.

Suggested Citation

  • Kim, Karam & Ryu, Doojin & Yu, Jinyoung, 2024. "Star analyst activities and stock price synchronicity: Korean equity market reforms," Emerging Markets Review, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:ememar:v:61:y:2024:i:c:s1566014124000438
    DOI: 10.1016/j.ememar.2024.101148
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    More about this item

    Keywords

    Analyst coverage; Chaebol; Firm-specific information; Market reform; Star analyst; Stock price synchronicity;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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