Text similarity in analyst reports and stock price synchronization

Yanqi Wang, Runyu Chen, Xiang Gao and Wenhao Qi

Journal of Economics and Business, 2025, vol. 136, issue C, No S0148619525000268

Abstract: Security analysts play key information intermediary roles in the capital market, and their analysis may reveal firm-specific facts that can enhance pricing efficiency. Using analyst research reports on listed Chinese companies, we empirically examine how text (dis)similarity among the reports written about a target company affects the company’s stock price synchronization. We perform such textual analysis on the premise that text (dis)similarity can measure the degree of incremental information in research reports. The results show a significant positive relationship between text similarity and price synchronization, a conclusion that holds after a series of robustness tests. The effect becomes more prominent with higher information asymmetry between firms and investors, more influential analyst reports, and better analysts’ ability to obtain new information. The mechanism lies in attention. As text similarity decreases, more analysts pay attention to the target company, incentivizing it to make more public announcements, which causes stock price synchronization to decrease. Our findings highlight a need for information diversity in the research analyst industry.

Keywords: Analyst research report; Text similarity; Textual analysis; Stock price synchronization (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148619525000268
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:136:y:2025:i:c:s0148619525000268

DOI: 10.1016/j.jeconbus.2025.106258

Access Statistics for this article

Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter

More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().