Uncovering the information content in abnormal institutional visits

Danting Chang and Feng Li

Finance Research Letters, 2023, vol. 55, issue PB

Abstract: We uncover the information contained in institutional investors’ collective corporate visit behaviors, which is incremental to their private information privileges. Abnormal institutional visit (AIV) significantly predicts cross-sectional stock returns in a positive direction, consistent with the hypothesis that given short-sale constraints and limited resources, institutions systematically allocate more visit efforts to firms that they deem to have promising prospects. Moreover, such information is yet not effectively reflected in analyst forecasts until firms officially announce the earnings, suggesting limitations in the role played by sell-side analysts as intermediaries to convey information to the market.

Keywords: Corporate visit; Information acquisition; Institutional investors; Analyst forecasts; Earnings announcements; Market efficiency (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G17 G23 G40 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pb:s1544612323003604

DOI: 10.1016/j.frl.2023.103988

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