Cross-Industry Information Sharing among Colleagues and Analyst Research

51 Pages Posted: 7 Jan 2020 Last revised: 29 Apr 2022

See all articles by Allen Huang

Allen Huang

Hong Kong University of Science and Technology - Department of Accounting

An-Ping Lin

Singapore Management University - School of Accountancy

Amy Zang

Hong Kong University of Science and Technology - Department of Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: December 12, 2019

Abstract

We identify a specific organizational resource in brokerage houses—information sharing among analyst colleagues who cover economically related industries along a supply chain. After controlling for brokerage selection effects, we show evidence consistent with the benefit of this resource to analyst research performance. Specifically, we find that analysts whose colleagues cover more economically connected industries have better research performance, especially when their colleagues produce higher-quality research. We further show that colleagues’ coverage of downstream (upstream) industries is positively related to the accuracy of only analysts’ revenue (expense) forecasts and that analysts and their highly connected colleagues tend to issue earnings forecast revisions contemporaneously. Last, we find that analysts with economically connected colleagues tend to have a higher level of industry specialization. Overall, our findings suggest that analysts rely on organizational resources to produce high-quality research. Hence, a portion of their performance and reputation is not transferable across employers.

Keywords: financial analyst, information sharing, economically connected industries, supply chain, analyst performance, industry specialization

JEL Classification: D23, G24, G29, L14, M14, M40, M41

Suggested Citation

Huang, Allen and Lin, An-Ping and Zang, Amy, Cross-Industry Information Sharing among Colleagues and Analyst Research (December 12, 2019). Available at SSRN: https://ssrn.com/abstract=3502820 or http://dx.doi.org/10.2139/ssrn.3502820

Allen Huang (Contact Author)

Hong Kong University of Science and Technology - Department of Accounting ( email )

LSK Business School Building
HKUST
Clear Water Bay, Kowloon
Hong Kong

HOME PAGE: http://www.AllenHuang.org

An-Ping Lin

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

Amy Zang

Hong Kong University of Science and Technology - Department of Accounting ( email )

LSK Business School Building
Clear Water Bay, Kowloon
Hong Kong
+852-23587561 (Phone)

HOME PAGE: http://www.AmyZang.org

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