Star CEO, Information Channels and Analysts’ Behavior

Abstract

Abstract: Once becoming stars in their industries, the CEOs of the enterprises will have information effects. This paper makes use of the data of the lists of Chinese enterprises, such as the “Best CEOs”, issued by mainstream financial medias, i.e., Forbes China and Fortune China, during 2008--2017 to study the impact of corporate CEOs becoming stars within their industries on the analysts’ behaviors with the DID model. The findings show that once becoming stars, CEOs will attract more attention and focus from the news medias, thereby increasing the attention of the analysts to their enterprises and reducing the earnings forecast bias and the degree of forecast differences of the analysts. Further investigation shows that star CEOs can improve analysts’ attention and the accuracy of their earnings forecasts. The reason lies in the fact that analysts can obtain information from multiple information channels and improve information quality.

Key words: star CEO, information channels, analysts' earnings forecasts

CLC Number:

F832.48

LIU Jia-wei, Ji Li. Star CEO, Information Channels and Analysts’ Behavior[J]. Contemporary Finance & Economics, 2021, 0(2): 124-136.

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