Stock recommendation and market reaction: the empirical analysis in Taiwan

Abstract

This study examines the effects of media recommendations on the performance of electronics companies listed on the Taiwan Stock Market. This empirical study found that investors who obtained information from a newspaper column existed positive and negative abnormal returns for –15 day and +1 day, respectively However, the abnormal returns were insignificant in the following six days. These analytical results provide evidences that stock market information is often leaked in advance and investors would hold a conservative position following information disclosure of recommendatory stock.

Keywords:

• Public information
• recommendatory stock
• abnormal return
• event study