Public Disclosure of Private Meetings: Does Observing Peers’ Information Acquisition Affect Analysts’ Attention Allocation?
82 Pages Posted: 17 Nov 2020 Last revised: 7 Sep 2022
Date Written: September 6, 2022
We investigate the impact of observing peers’ information acquisition decisions on financial analysts’ own allocation of attention. Using the timely disclosure mandate by the Shenzhen Stock Exchange as a setting, we find that, when analysts observe that a firm has been visited by other analysts, they pay less attention to that firm. This finding is consistent with the conjecture that the timely disclosure reveals the relative information advantage of visiting analysts, leading nonvisiting analysts to reallocate their limited attention and resources. We find that the reduction in nonvisiting analysts’ attention not only occurs shortly after a visit but also persists over the long term. Further evidence suggests that the timely disclosure has positive externalities in the form of increased attention and improved information environment for nonvisited peer firms.
Keywords: attention allocation, informational efficiency, corporate site visits, externalities
JEL Classification: G24, G14, M41
Suggested Citation: Suggested Citation