Equity Analyst Social Interactions and Geographic Information Transmission
Forthcoming, Review of Accounting Studies
43 Pages Posted: 22 Aug 2017 Last revised: 17 Mar 2022
Date Written: March 9, 2021
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