Analyst-Peer Alumni Tie

Abstract

This paper studies the impact of peer alumni ties on analysts' professional performance. Using LinkedIn data, we find that analysts with larger peer alumni networks make more accurate forecasts, particularly among female and seasoned analysts. This effect differs from analyst-executive alumni ties and becomes more evident in contexts of higher analyst-firm information asymmetry. Furthermore, university anniversaries further amplify the benefits of alumni networks, while the COVID-19 pandemic diminished them, highlighting the importance of offline interactions. Additionally, investors place greater trust in stock recommendations issued by analysts with larger alumni networks, resulting in stronger market reactions. Our findings emphasize the critical role of information flow within analyst networks. 

Keywords: Peer Alumni Tie, Social Network, Analyst Performance, Information Flow, LinkedIn

JEL Classification: G10, G14, G24, G41, J24