The Geography of Equity Analysis

48 Pages Posted: 26 Nov 2003

See all articles by Christopher J. Malloy

Christopher J. Malloy

Harvard Business School; National Bureau of Economic Research (NBER)

Date Written: October 27, 2003


I provide evidence that geographically proximate analysts are more accurate than other analysts. Stock returns immediately surrounding forecast revisions suggest that local analysts impact prices more than other analysts. These effects are strongest for firms located in small cities and remote areas. Collectively these results suggest that geographically proximate analysts possess an information advantage over other analysts, and that this advantage translates into better performance. The well-documented underwriter affiliation bias in stock recommendations is concentrated among distant affiliated analysts; recommendations by local affiliated analysts are unbiased. This finding reveals a geographic component to the agency problems in the industry.

Keywords: Geography, analyst forecasts, accuracy, distance

JEL Classification: G10, M41, D82

Suggested Citation

Malloy, Christopher J., The Geography of Equity Analysis (October 27, 2003). Available at SSRN: or

Christopher J. Malloy (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Baker Library 277
Boston, MA 02163
United States
617-495-4383 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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