Working Paper

Investor Attention to Stock Recommendations



Gavriilidis K, Herbst P & Kagkadis A (2016) Investor Attention to Stock Recommendations. University of Stirling Management School Working Papers.

This study investigates the role of investor attention to stock recommendations on explaining the post-recommendation price drift. We construct a measure of attention to stock recommendations based on the abnormal trading volume on the days surrounding the recommendation. Our findings suggest that stock-recommendations which attract high investor attention consistently generate more pronounced post-announcement drifts than recommendations which receive low investor attention. In addition, we provide evidence that this phenomenon is mainly driven by upgrades rather than downgrades, consistent with the idea that increased volume leads to higher visibility and an increased number of unsophisticated investors buying the stock. Our findings remain robust when we control for firm-attention, analyst characteristics, recommendation characteristics and earnings announcements around the recommendation date.

Investor Attention; Analyst Recommendations; Abnormal Trading Volume

JEL codes

  • G14: Information and Market Efficiency; Event Studies; Insider Trading
  • G20: Financial Institutions and Services: General
  • G24: Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies

Publication date29/12/2016
Publisher URL…25_fullpaper.pdf

People (2)


Dr Costas Gavriilidis
Dr Costas Gavriilidis

Senior Lecturer, Accounting & Finance

Dr Patrick Herbst
Dr Patrick Herbst

Senior Lecturer, Accounting & Finance