Hate Crimes and Analyst Forecast Behaviors Amidst the COVID-19 Pandemic

59 Pages Posted: 3 Jan 2023 Last revised: 24 Nov 2024

See all articles by Yankuo Qiao

Yankuo Qiao

The George B. Delaplaine Jr. School of Business, Hood College

Qinzheng Xu

Tulane University

Tengfei Zhang

Rutgers University - Rutgers School of Business-Camden

Date Written: January 2, 2023

Abstract

We examine how forecast behaviors of East Asian financial analysts in the United States would change in the face of escalated crimes against Asians amid COVID-19. Using a DID approach, we find that compared with non-East-Asian analysts, East Asian analysts issue financial forecasts of lower boldness, higher pessimism, lower updating frequency, and weaker timeliness amidst the pandemic. The inferior forecast quality of East Asian financial analysts is associated with increased analyst herding, decreased consensus forecast accuracy, and lower post-earnings announcement abnormal returns. Our findings imply that racial animus and bias could distort forecast behaviors of analysts from ethnic minority backgrounds, resulting in reduced market information efficiency and valuation.

Keywords: COVID-19, Anti-Asian Hate Crime, Financial Analyst, Sell-Side Analyst, Forecast Boldness, Analyst Herding, Information Efficiency, Market Valuation JEL Classification: G24, G30, G40, M14, I18

JEL Classification: G24; G30; G40; M14; I18

Suggested Citation

Qiao, Yankuo and Xu, Qinzheng and Zhang, Tengfei, Hate Crimes and Analyst Forecast Behaviors Amidst the COVID-19 Pandemic (January 2, 2023). Available at SSRN: https://ssrn.com/abstract=4315923 or http://dx.doi.org/10.2139/ssrn.4315923

Yankuo Qiao (Contact Author)

The George B. Delaplaine Jr. School of Business, Hood College ( email )

401 Rosemont Ave
Frederick, MD 21701

Qinzheng Xu

Tulane University

Tengfei Zhang

Rutgers University - Rutgers School of Business-Camden ( email )

227 Penn Street
Camden, NJ 08102
United States

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