Implications of analyst recommendations on stock market- a bibliometric study

This comprehensive review paper offers scholarly insights into financial analysts’ recommendations and their impact on stock markets. Our focus is on finance-based frameworks, rather than accounting frameworks. Academic circles express frustration about the prevalence of studies focused on analysts with a specific emphasis on the US, reflecting a sense of exasperation. There is a feeling that the literature on analysts is becoming over-explored, with some even deeming it "over the hill." This frustration stems from the repetitive nature of studies and a narrow focus on certain variables, which has led to a lack of diversity and innovation in analyst research. Hence, our study aims to comprehend the historical, present, and prospective implications of analysts’ recommendations on the stock market. By reviewing 398 papers spanning from 1980 to 2023, we delve into the realm of Analyst Recommendations research. This review synthesizes the literature on analyst recommendations and their multifaceted influence on the stock market. Evidence suggests that analyst opinions drive trading volume and short-term price movements, yet their long-term profitability is debated due to market efficiency and potential herding behaviour. Variations in market development, cultural factors, and the nature of information dissemination shape the effectiveness of analyst advice across different contexts. Our review synthesizes insights from 398 studies (1980–2023) on the impact of financial analysts’ recommendations, emphasizing finance-based frameworks. While analyst opinions reliably influence trading volume and short-term stock prices, their long-term value remains debated due to market efficiency and herding concerns. The literature’s US-centric and repetitive nature underscores the need for broader, more innovative research. Our analysis reveals that the effectiveness of analyst recommendations varies across market maturity, cultural contexts, and information environments, highlighting the importance of diversified approaches to fully understand analysts’ evolving and context-dependent influence on global stock markets.