earticle

영어

Using trading data from the Korean equity market, we investigate whether there is any difference amongst individual investors, domestic institutional investors, and foreign institutional investors in trading responses to analyst reports. We also examine the determinants of the trading responses of each investor type to analyst reports, where we use firm characteristics as well as analyst characteristics as the determinants of the release date trading volumes of each investor type. Our findings are as follows. First, individual investors are the most responsive investor group to the analyst reports, suggesting that institutional investors (domestic and foreign) perceive analyst reports to be less informative than do the individual investors. In particular, individual investors are more responsive to analyst reports on small firms, firms neglected by analysts, and firms with large inside ownership as well as analyst reports with optimistic forecasts. Second, domestic institutional investors are more responsive to reports on neglected firms and firms with high volatility, which are characterized by large information asymmetry. Furthermore, the increase in trading volume by domestic institutional investors occurs prior to the release date of analyst reports, suggesting that domestic institutional investors are informed traders. Third, foreign institutional investors do not show meaningful responses to research reports by local analysts, suggesting that foreign institutional investors do not find the information provided by local analysts as being informative.