Analyst Geographic Proximity to Industry Center, Industry Information, and the Efficacy of Analyst Research Output

62 Pages Posted: 21 Jun 2018

See all articles by Lixin Huang

Lixin Huang

Georgia State University

Omesh Kini

Georgia State University

Ashutosh Tyagi

Georgia State University

Zhe Wang

Georgia State University

Date Written: June 3, 2018

Abstract

We propose that an analyst’s distance-to-industry-center (DTIC) can serve as an instrument for industry information. Consistent with this hypothesis, we find that DTIC has a significant negative impact on forecast accuracy. We conduct a series of tests to corroborate the link between DTIC and industry information, which is relevant for within-industry co-movement of firm fundamentals and returns. Finally, we exploit the impact of Chinese import shocks on different industries as exogenous shocks to industry centers to establish a causal link between DTIC and forecast accuracy. Overall, we shed light on how an analyst’s industry information is disseminated into the market.

Keywords: Analysts, Forecast Accuracy, Distance to Industry Center, Information Production

JEL Classification: G12, G14, G20, G24

Suggested Citation

Huang, Lixin and Kini, Omesh and Tyagi, Ashutosh and Wang, Zhe, Analyst Geographic Proximity to Industry Center, Industry Information, and the Efficacy of Analyst Research Output (June 3, 2018). Available at SSRN: https://ssrn.com/abstract=3192704 or http://dx.doi.org/10.2139/ssrn.3192704

Lixin Huang

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Omesh Kini (Contact Author)

Georgia State University ( email )

University Plaza
Atlanta, GA 30303-3083
United States
404-651-2656 (Phone)

Ashutosh Tyagi

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Zhe Wang

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

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