On the fast track: Information acquisition costs and information production

• 成果类型: Article
• 署名作者: Chen, Deqiu; Ma, Yujing; Martin, Xiumin; Michaely, Roni
• 署名单位: University of International Business & Economics; Hong Kong Polytechnic University; Washington University (WUSTL); University of Hong Kong; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.025
• 发表日期: 2022
• 页码: 794-823
• 关键词: information acquisition; Acquisition cost; Information production; information quality; Soft information; Sell-side analysts; Price efficiency

摘要

Using the introduction of high-speed rail (HSR) as an exogenous shock to costs of information acquisition, we show reductions in information-acquisition costs lead to (i) a significant increase in information production, evidenced by a higher frequency of analysts visiting portfolio firms and (ii) improvement in output quality, manifested in higher forecast accuracy and better recommendations. The effect is more pronounced for firms with information that is difficult to produce. Importantly, more information production is also associated with improved price efficiency. We corroborate these findings using a largescale survey of financial analysts. Finally, both the empirical and survey results highlight the importance of soft information in analysts' unique-information production. (c) 2021 Elsevier B.V. All rights reserved.