Market Segmentation and Differential Reactions of Local and Foreign Investors to Analyst Recommendations
利用中国A股和H股的双重股权结构，发现本地和外国投资者对分析师推荐的反应不同，这种差异源于分析师与投资者的社会关系，且推荐可能加剧市场分割。
This paper uses segmented dual-class shares of Chinese firms—A shares traded in mainland China by local investors and H shares traded in Hong Kong by foreign investors—to document a rich pattern in the differential reactions of local and foreign investors to analyst recommendations. This pattern reveals that social connections between analysts and investors affect investor reactions to analyst recommendations. Because of the investors’ differential reactions, analyst recommendations may exacerbate, rather than attenuate, the market segmentation between the two share classes.Received January 28, 2016; editorial decision October 23, 2016 by Editor Robin Greenwood.