| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5102306 | Pacific-Basin Finance Journal | 2017 | 28 Pages |
Abstract
Post-earnings-announcement drift (PEAD) is frequently discovered in numerous countries including Korea. We attempt to explain PEAD in the Korean market using anchoring bias. Investors interpret impact of earnings news based on a stock's nearness to 52-week high, and hence underreact to positive earnings news if the stock price is near its peak. We find that among positive earnings stocks, PEAD is pronounced when they are near 52-week highs. Furthermore, excessive optimism in analyst forecasts is larger among stocks far from 52-week highs. Lastly, individual investors' buying pressure around earnings announcement is concentrated on stocks far from 52-week highs.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jihoon Goh, Byoung-Hyun Jeon,