The Role of Analysts in Intra-Industry Information Transfer

Forthcoming in The Accounting Review

INSEAD Working Paper No. 213/29/AC

51 Pages Posted: 4 Feb 2013

See all articles by Gilles Hilary

Gilles Hilary

Georgetown University - McDonough School of Business

Rui Shen

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics; Shenzhen Finance Institute

Date Written: February 4, 2013

Abstract

When a firm issues a management forecast, analysts who have observed more forecasts from this firm since covering it (i.e., have more MF-experience) subsequently improve their own accuracy more and provide timelier earnings forecasts for other (non–issuing) firms in the same industry. We also find that, subsequent to a management forecast, investors are more responsive to forecast revisions for non‐issuing firms made by analysts with more MF-experience. Further tests suggest that our results are not explained by endogeneity in firm coverage.

Keywords: information transfer; financial analysts; externalities

JEL Classification: M4, G1

Suggested Citation

Hilary, Gilles and Shen, Rui, The Role of Analysts in Intra-Industry Information Transfer (February 4, 2013). Forthcoming in The Accounting Review, INSEAD Working Paper No. 213/29/AC, Available at SSRN: https://ssrn.com/abstract=2211469 or http://dx.doi.org/10.2139/ssrn.2211469

Gilles Hilary (Contact Author)

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Rui Shen

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics ( email )

2001 Longxiang Road, Longgang District
Shenzhen, 518172
China

Shenzhen Finance Institute ( email )

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