Equity Analyst Social Interactions and Geographic Information Transmission

We find that earnings forecasts by analysts with more local peers, defined as analysts working in the same brokerage office who cover different firms headquartered in the same area, are more accurate and better reflect negative geographic shocks in firm earnings. In addition, geographic momentum in stock returns is attenuated for firms followed by more local peers. These findings suggest that social interactions among local peer analysts facilitate the transmission of complex, soft information about geographic factors to investors.

Keywords: Social Interaction, Financial Analysts, Geographic Information

JEL Classification: G10, G11, G12, G14, G23, G24

Suggested Citation: Suggested Citation

Chen, Qi and Mayew, William J. and Yan, Huihao, Equity Analyst Social Interactions and Geographic Information Transmission (March 9, 2021). Forthcoming, Review of Accounting Studies, Available at SSRN: https://ssrn.com/abstract=3022183 or http://dx.doi.org/10.2139/ssrn.3022183