Does time-space compression affect analyst forecast performance?

Kejing Chen, Wenqi Guo, Lin Jiang, Xiong Xiong and Mo Yang

Research in International Business and Finance, 2022, vol. 62, issue C

Abstract: Despite the increasing attention given to the time-space compression effect brought by improved transportation, the economic consequences, especially those on analyst forecast performance, have yet to be explored. Based on difference-in-difference model designs and a sample of China’s stock markets, we find robust empirical evidence that high-speed railway connections have a significantly positive effect on analyst forecast performance from various perspectives. We further conduct counterfactual analyses to examine the underlying mechanism and analyse the influence of high-speed railway connections on analysts’ stock recommendations. This study contributes to the influencing factors for sell-side analyst performance and the effect of geographic proximity on information efficiency.

Keywords: High-speed railway connections; Analyst forecast performance; Site visits; Information asymmetry; Stock recommendation (search for similar items in EconPapers)
JEL-codes: D8 G11 G14 G24 R42 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001076

DOI: 10.1016/j.ribaf.2022.101719

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