Wei, Kelsey D.

Permanent URI for this collectionhttps://hdl.handle.net/10735.1/3632

Kelsey Wei serves as an Assistant Professor of Finance and Managerial Economics. Her current research involves:

  • Mutual fund performance and flow
  • Institutional investors
  • Mergers and acquisitions
  • Foreign exchange exposure

Learn more about Dr. Wei on her Faculty page, personal website and Research Explorer page.


Recent Submissions

Now showing 1 - 2 of 2
  • Item
    Follow the Money: Investor Trading around Investor-Paid Credit Rating Changes
    (Elsevier B.V.) Bhattacharya, U.; Wei, Kelsey D.; Xia, Han; 77421245 (Wei, KD); Wei, Kelsey D.; Xia, Han
    Using institutional equity trading data, we find that a set of small institutional investors consistently follow credit ratings issued by an investor-paid rating agency in their trading decisions. Although rating information is credit related, we find that these followers often respond more strongly to investor-paid ratings than to influential trading signals, such as earnings announcements, analysts' earnings forecast revisions, and recommendation changes. Followers outperform non-followers, and show improved trading performance after becoming followers. We conclude that investor-paid rating agencies offer small institutional investors a cost-effective alternative to in-house research. ©2019 Elsevier B.V.
  • Item
    Analyst Recommendations, Mutual Fund Herding, and Overreaction in Stock Prices
    Brown, N. C.; Wei, Kelsey D.; Wermers, R.; 0000 0000 1760 8443 (Wei, KD); 77421245 (Wei, KD)
    This paper documents that mutual funds "herd" (trade together) into stocks with consensus sell-side analyst upgrades, and herd out of stocks with consensus downgrades. This influence of analyst recommendation changes on fund herding is stronger for downgrades, and among managers with greater career concerns. These findings indicate that career-concerned managers are incentivized to follow analyst information, and that managers have a greater tendency to herd on negative stock information, given the greater reputational and litigation risk of holding losing stocks. Furthermore, starting in the mid-1990s (when aggregate mutual fund equity ownership is significantly higher), stocks traded by career-concerned herds of fund managers in response to analyst recommendation changes experience a significant same-quarter price impact, followed by a sharp subsequent price reversal. Our evidence suggests that analyst recommendation revisions induce herding by career-concerned fund managers, and that this type of trading has become price destabilizing with the increasing level of mutual fund ownership of stocks.

Works in Treasures @ UT Dallas are made available exclusively for educational purposes such as research or instruction. Literary rights, including copyright for published works held by the creator(s) or their heirs, or other third parties may apply. All rights are reserved unless otherwise indicated by the copyright owner(s).