InGroupBiasInFinancialMarkets_preview%20.pdf
at
https://www.aeaweb.org/conference/2017/preliminary/paper/a7nQ4G8n... equity analysts may have less favorable opinions about firms that are not headed by CEOs of their own “group”. We define groups based on gender, ethnicity and political attitudes. Examining analysts’ earnings forecasts, we find that male analysts have lower assessments of firms headed by female CEOs than of firms headed by male CEOs. Results are very similar if in-groups are defined based on ethnicity or political attitudes: Earnings forecasts of domestic analysts are lower for firms headed by foreign CEOs and earnings forecasts of Republican analysts [meaning most of them] are lower for firms headed by Democratic CEOs. There has gotta be a way to make some money off this sort of thing.
