 Foreign analysts and managerial investment learning from stock marketsLingmin Xie, Zhian Chen, Donghui Li and Hongping Tan Journal of Multinational Financial Management, 2022, vol. 64, issue C Abstract: This paper provides evidence on the role of foreign analysts in improving the informativeness of stock prices for corporate managers. Using a large sample of 15,623 firms in 42 economies, we find that foreign analysts improve managerial learning from stock markets as measured in terms of investment-to-price sensitivity. Consistent with the flow of information from global firms to local firms, we directly find that foreign analysts reduces firms’ price delay to global market information. We also dismiss the concern that Tobin's Q captures no additional information that is reflected only in the stock price. Cross-sectional analyses indicate that the positive effect of foreign analysts on managerial learning is more pronounced for firms in developed economies, firms with better financial positions, firms in less competitive industries, and firms with less foreign ownership. Our findings provide cross-country evidence on the informative role of foreign analysts for managers, which in turn strengthens the real effect of financial markets. Keywords: Foreign analyst; Local analyst; Managerial learning; Investment-to-price sensitivity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:64:y:2022:i:c:s1042444x22000056 DOI: 10.1016/j.mulfin.2022.100733 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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