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Forecasting Success: How Family Social Status Shapes Analyst Performance in Financial Markets
Tran Tri Trinh  1@  , Sunghoon Joo  2@  , Jennifer Brodmann  2@  
1 : Neoma Business School
Neoma Business School, Neoma Business School
2 : California State University Dominguez Hills

We examine the impact of family social status on the performance of financial analysts, emphasizing its influence on forecasting accuracy, boldness, market reactions, and career outcomes. Utilizing a dataset of 57,836 earnings forecasts from 769 analysts between 1993 and 2019, we find that analysts from affluent backgrounds demonstrate significantly higher forecast accuracy, particularly when they maintain social or educational ties with corporate executives. Additionally, these analysts are more likely to issue bold forecasts that deviate from consensus estimates, reflecting their more beneficial access to critical information. Market reactions corroborate this advantage, as investors respond more favorably to upward revisions from analysts with higher family wealth. Finally, our analysis indicates that analysts from wealthy families enjoy better career trajectories, characterized by higher promotion rates and lower termination risks. This research contributes to understanding how family background shapes economic outcomes in the finance sector, highlighting the critical role of social capital in enhancing analyst performance.


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