The Value of Differing Points of View: Evidence from Financial Analysts' Geographic Diversity

• 成果类型: Article
• 署名作者: Gerken, William C.; Painter, Marcus O.
• 署名单位: University of Kentucky; Saint Louis University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac033
• 发表日期: 2023
• 页码: 409
• 关键词: information; earnings; industry; HOME

摘要

Using satellite imagery of retail firms' parking lots to measure time-varying local firm-specific performance, we document that analysts incorporate local information into their forecasts. Analysts rely more on local signals when less firm-wide information is available. This incorporation of noisy local firm information has firm-level implications. Examining across industries, we find causal evidence that geographic concentration of analysts increases consensus forecast errors and decreases firm liquidity. These effects are stronger for harder-to-value stocks. The market values geographic firm information, as the abnormal return around forecast revisions is higher for analysts who cover a firm from a unique location.