Does Time-Space Compression Affect Analysts’ Forecast Performance?
Chen, K., Guo, W., Jiang, L., Xiong, X., & Yang, M. (2022). Does time-space compression affect analyst forecast performance?. Research in International Business and Finance, 62, 101719.
21 Pages Posted: 5 May 2021 Last revised: 26 Aug 2022
Date Written: July 16, 2022
Despite the increasing attention given to the time-space compression effect brought by improved
transportation, the economic consequences, especially those on analyst forecast performance,
have yet to be explored. Based on difference-in-difference model designs and a sample of China’s
stock markets, we find robust empirical evidence that high-speed railway connections have a
significantly positive effect on analyst forecast performance from various perspectives. We further
conduct counterfactual analyses to examine the underlying mechanism and analyse the influence
of high-speed railway connections on analysts’ stock recommendations. This study contributes to
the influencing factors for sell-side analyst performance and the effect of geographic proximity on
Keywords: High-speed railway connections; Analyst forecast performance; Site visits; Information asymmetry; Stock recommendation
JEL Classification: D8, G11, G14, G24, R42
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