Institutional investor information network, analyst forecasting and stock price crash risk

Xiao-Li Gong and Jia Liu

Research in International Business and Finance, 2023, vol. 65, issue C

Abstract: In this paper, we construct the information network of fund investors based on the theory of social relationship networks and examine its impact of fund information sharing with analysts on stock price crash risk. Our results show that private information sharing among institutional investors reduces crash risk. Further results show that fund information sharing can alleviate analyst optimism bias and improve analyst forecast accuracy, which further reduces stock price crash risk. Moreover, these identified effects are more pronounced in a bull market than a bear market. Our study contributes to the research on private information transmission in fund information networks, and provides a new perspective for recognizing the relationships among institutional investor behavior, analyst forecasting, and stock price crash risk.

Keywords: Fund information network; Analyst optimism bias; Information sharing; Crash risk (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:65:y:2023:i:c:s0275531923000685

DOI: 10.1016/j.ribaf.2023.101942

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