Company Visit Disclosure Regulation and Analysts’ Information Acquisition
55 Pages Posted: 30 Jun 2021 Last revised: 14 Jul 2022
Date Written: July 13, 2022
There is a debate on whether company visits, an important channel of analysts’ information acquisition, should be regulated similar to management disclosure under Regulation Fair Disclosure. Exploiting a Shenzhen Stock Exchange regulation, this study examines how mandating timely disclosure of analysts’ company visits alters analysts’ information acquisition. We find that the regulation creates a chilling effect on visiting analysts’ private information acquisition, negatively affecting their company visits, stock coverage, and research report issuance. Due to the chilling effect, analysts’ consensus earnings forecasts become less accurate in the post-period for stocks receiving more analyst visits in the pre-period.
Keywords: company visit; analysts; disclosure regulation; chilling effect; China
JEL Classification: M41; G23; K22
Suggested Citation: Suggested Citation