Public Disclosure of Private Meetings: Does Observing Peers’ Information Acquisition Affect Analysts’ Attention Allocation?

75 Pages Posted: 17 Nov 2020 Last revised: 11 Dec 2023

See all articles by Yi Ru

Yi Ru

Renmin University of China - Business School

Ronghuo Zheng

University of Texas at Austin - McCombs School of Business

Yuan Zou

Harvard University - Business School (HBS)

Date Written: December 8, 2023

Abstract

We investigate the impact of observing peers’ information acquisition on financial analysts’ own allocation of attention. Using the timely disclosure mandate by the Shenzhen Stock Exchange as a setting, we find that, shortly after analysts observe that a firm has been visited by peer analysts, they reduce attention to that firm. This finding is consistent with the conjecture that the timely disclosure reveals the first-mover advantage of visiting analysts, leading nonvisiting analysts to reallocate their limited attention. We also find that visited firms experience deterioration in their information environments possibly due to the reduced attention from nonvisiting analysts. Further evidence suggests that broad impacts of the timely disclosure mandate include positive externalities in the form of increased immediate attention for nonvisited peer firms and long-term consequence of nonvisiting analysts’ reduced short-term attention toward visited firms.

Keywords: attention allocation, informational efficiency, corporate site visits, externalities

JEL Classification: G24, G14, M41

Suggested Citation

Ru, Yi and Zheng, Ronghuo and Zou, Yuan, Public Disclosure of Private Meetings: Does Observing Peers’ Information Acquisition Affect Analysts’ Attention Allocation? (December 8, 2023). Available at SSRN: https://ssrn.com/abstract=3727718 or http://dx.doi.org/10.2139/ssrn.3727718

Yi Ru

Renmin University of China - Business School ( email )

Room 929
Mingde Business Building
Beijing, Beijing 100872
China

Ronghuo Zheng

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

Yuan Zou (Contact Author)

Harvard University - Business School (HBS)

Soldiers Field Road
Morgan 362
Boston, MA 02163
United States

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