Do culture, sentiment, and cognitive dissonance explain the ‘above suspicion’ anomalies?

Ali Altanlar, Jiaqi Guo, Phil Holmes

Research output: Contribution to journalArticle

Abstract

We investigate how cognitive dissonance arising from interactions between sentiment and culture affects momentum and post‐earnings‐announcement‐drift (PEAD). We focus on differing views relating to change between Western and East Asian cultures. Building on Hong and Stein (1999) and recognising Westerners' (Easterners') belief in continuation (reversal), we propose cognitive dissonance arises in different circumstances and to differing degrees in the two cultures, resulting in it being a key driver of the anomalies. Results support our hypotheses, suggesting sentiment and culture interact to impact cognitive dissonance, explaining differences in the anomalies across countries evident in prior literature.
Original languageEnglish
Pages (from-to)(In-Press)
Number of pages28
JournalEuropean Financial Management
Volume(In-Press)
Early online date10 Oct 2018
DOIs
Publication statusE-pub ahead of print - 10 Oct 2018

Fingerprint

Sentiment
Anomaly
Suspicion
Cognitive dissonance
Reversal
Interaction
Asia
Momentum

Keywords

  • cognitive dissonance
  • culture
  • investor sentiment
  • momentum
  • post-earnings-announcement-drift

Cite this

Do culture, sentiment, and cognitive dissonance explain the ‘above suspicion’ anomalies? / Altanlar, Ali ; Guo, Jiaqi; Holmes, Phil.

In: European Financial Management, Vol. (In-Press), 10.10.2018, p. (In-Press).

Research output: Contribution to journalArticle

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