What Do Questions Reveal? Skill Acquisition, Detection, and Recognition in the Capital Markets

81 Pages Posted: 8 Jan 2021 Last revised: 31 May 2024

See all articles by Ling Cen

Ling Cen

The Chinese University of Hong Kong

Yanru Han

Stevens Institute of Technology - School of Business

Jarrad Harford

University of Washington; European Corporate Governance Institute (ECGI)

Date Written: September 1, 2021

Abstract

We provide a generalizable methodology to analyze the acquisition, detection, and diffusion of topic-specific skills in the capital markets, demonstrating it in a supply-chain information setting. We construct an ex-ante topic-specific skill measure based on analysts’ past earnings conference call questions. The results show that analysts with supply-chain-specific skill achieve a greater improvement in forecast accuracy relative to their peers when the firms experience exogenous supply-chain information shocks. Skills diffuse among analysts through cross-brokerage learning and within-brokerage coaching. While brokerage firms do not always assign coverage according to analyst topic-specific skills, evidence suggests that investors do recognize these skills.

Keywords: Analysts, Conference Calls, Topic-Specific Skills, Information Processing JEL Classifications: G24, D83, J24 Topic-Specific Skills, Information Processing JEL Classifications: G24, D83, J24

JEL Classification: G24, D83, J24

Suggested Citation

Cen, Ling and Han, Yanru and Harford, Jarrad, What Do Questions Reveal? Skill Acquisition, Detection, and Recognition in the Capital Markets (September 1, 2021). Available at SSRN: https://ssrn.com/abstract=3730815 or http://dx.doi.org/10.2139/ssrn.3730815

Ling Cen (Contact Author)

The Chinese University of Hong Kong ( email )

CYT Building
Sha Tin
Hong Kong, Hong Kong
Hong Kong

HOME PAGE: http:///sites.google.com/site/cenling/

Yanru Han

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Jarrad Harford

University of Washington ( email )

Box 353226
Seattle, WA 98195-3226
United States
206-543-4796 (Phone)
206-543-7472 (Fax)

HOME PAGE: http://faculty.washington.edu/jarrad/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
442
Abstract Views
1,874
Rank
125,429
PlumX Metrics