Company Visit Disclosure Regulation and Analysts’ Information Acquisition

55 Pages Posted: 30 Jun 2021 Last revised: 14 Jul 2022

See all articles by Bin Ke

Bin Ke

National University of Singapore

Dongmin Kong

School of Economics, Huazhong University of Science and Technology

Shasha Liu

School of Management, Jinan University

Date Written: July 13, 2022

Abstract

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

Ke, Bin and Kong, Dongmin and Liu, Shasha, Company Visit Disclosure Regulation and Analysts’ Information Acquisition (July 13, 2022). Available at SSRN: https://ssrn.com/abstract=3870279 or http://dx.doi.org/10.2139/ssrn.3870279

Bin Ke (Contact Author)

National University of Singapore ( email )

Mochtar Riady Building, BIZ 1, #07-53
15 Kent Ridge Drive
Singapore, 119245
Singapore
+6566013133 (Phone)

Dongmin Kong

School of Economics, Huazhong University of Science and Technology ( email )

Bldg. of Econ. School, Louyu Rd. 1037#
HUST, Hongshan Dist.
Wuhan, Hubei 430074
China

Shasha Liu

School of Management, Jinan University ( email )

No. 601, West Huangpu Road
Guangzhou, Guangdong 510632
China

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