Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 1, 2023 erstellt
Description:
This paper examines how the anchoring effect causes investor underreaction to global firm-specific news. Using a high-frequency methodology to identify news events for stocks in 23 developed countries from 2004 to 2021, the results show that investors tend to hold on to their initial beliefs about a stock despite new information. The 52-week high anchor affects the processing of firm-specific news, leading to a distorted belief updating process. Regression analyses indicate that the interaction between firm-specific news return and nearness to the 52-week high is related to a significant risk-adjusted return, providing evidence of investors' distorted belief updating process