Air pollution and analyst information production

Chao Kevin Li, Jin-hui Luo and Naomi S. Soderstrom

Journal of Corporate Finance, 2020, vol. 60, issue C

Abstract: Recent studies investigate the impact of air pollution on labor productivity. We extend this literature by showing that air pollution negatively affects equity analyst information production. Analysts exposed to air pollution are less likely to issue timely forecasts or improve their forecast accuracy. Investigating the underlying mechanism, we find that analysts exposed to air pollution are less likely to provide bold (especially, negatively bold) forecasts. We also find evidence that market pricing is less sensitive to forecast revisions issued by analysts exposed to air pollution. Our results are robust to controlling for firm/analyst and time fixed effects, as well as additional specifications employing difference-in-differences designs and placebo tests.

Keywords: Particulate matter (PM) pollution; Air pollution; Analysts; Forecast timeliness; Forecast boldness; Work productivity (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:60:y:2020:i:c:s0929119919300239

DOI: 10.1016/j.jcorpfin.2019.101536

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