Abstract
AbstractWe examine institutional trading in relation to changes in consensus recommendations over time. We find that pre‐Reg FD's positive contemporaneous relation between hedge fund trading and change in consensus becomes negative after Reg FD, but the positive relation between nonhedge fund trading and change in consensus continues even after Reg FD. Furthermore, during post‐Reg FD, while the performance of hedge funds’ trades that contradict with analysts improve, nonhedge funds’ trades that agree with analysts significantly deteriorate. Our evidence suggests that hedge funds have better information processing skill and are more cognizant about the role of selective information in analyst recommendations.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
