Riding Attention Spikes: How Analysts Respond to Advertising
Prof. Yin WANG
Assistant Professor, Singapore Management University
Date: 20 November 2024 (Wednesday)
Time: 10:00 – 11:30
Venue: E22-G015
Host: Prof. Duncan LIU, Assistant Professor in Accounting
Abstract
Product market advertising, albeit containing little new information, triggers spikes in investor attention. Using weekly advertising data, we find that sell-side analysts issue optimistic earnings forecasts in response to heavier advertising of the prior week. This effect is not driven by confounding earnings or product news. It is more pronounced for experienced analysts and analysts affiliated with brokerage firms relying solely on trading revenues. The optimistic forecast bias intensifies the impact of advertising on investor trades, especially on retail buying, of the underlying stock during the following week. Overall, analysts appear to issue optimistic forecasts strategically to exploit retail investor attention spikes induced by advertising.
Speaker
Prof. Yin WANG is an Assistant Professor of Accounting at Singapore Management University (SMU). He earned his PhD in Management Science (Accounting) from HEC Paris and was a Visiting Scholar at the University of Michigan’s Ross School of Business. Before entering academia, he led a team in the Management Control Department at BNP Paribas in Paris, where he focused on risk and finance within the leasing investment and finance sector. Prof. Wang has published research in The Accounting Review, with a broad range of interests including disclosure and its real effects, advertising spill-over effects in capital markets, financial intermediaries, common ownership, ESG disclosure, insider trading, earnings management, regulation, and corporate governance. A recipient of multiple teaching awards at SMU, Prof. Wang is dedicated to teaching Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, and Private Equity across both undergraduate and postgraduate programs. His courses have been recognized as exemplary models for junior faculty and PhD students.
All are welcome!
