Publication Type
Journal Article
Version
acceptedVersion
Publication Date
7-2016
Abstract
This study examines the impact of corporate site visits on analysts’ forecast accuracy based on a sample of such visits to Chinese listed firms during 2009–2012. We find that analysts who conduct visits (“visiting analysts”) have a greater increase in forecast accuracy than other analysts. Consistent with the notion that site visits facilitate analysts’ information acquisition through observing firms’ operations, we find that the results are stronger for manufacturing firms, firms with more tangible assets, and firms with more concentrated business lines. Moreover, we find that the effect of a site visit is greater when the site visit is an analyst-only visit, when the current visit is preceded by fewer visits, and when visiting analysts are based far from the visited firms. Furthermore, we find that site visits partially mitigate nonlocal analysts’ information disadvantage. Collectively, these results indicate that site visits are an important information acquisition activity for analysts.
Keywords
Analyst forecasts, Information acquisition activities, Local advantage, Site visits
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Review of Accounting Studies
Volume
21
Issue
4
First Page
1245
Last Page
1286
ISSN
1380-6653
Identifier
10.1007/s11142-016-9368-9
Publisher
Springer Verlag (Germany)
Citation
CHENG, Qiang; DU, Fei; WANG, Xin; and WANG, Yutao.
Seeing is believing: Analysts' corporate site visits. (2016). Review of Accounting Studies. 21, (4), 1245-1286.
Available at: https://ink.library.smu.edu.sg/soa_research/1542
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1007/s11142-016-9368-9