Seeing is believing: analysts’ corporate site visits

By Qiang Cheng, Fei Du, Xin Wang, Yutao Wang. 2016

135 citations recorded by the source corpus.

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.

Subfields: Cognitive Neuroscience, General Decision Sciences, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/efd0ef776768b8bec9622208eae2afbd7aa7632b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In General Decision Sciences

1. Rui Dong
2. Yongxiang Wang
3. Nianhang Xu
4. Raymond J. Fisman

In Management Science and Operations Research

1. Roni Michaely
2. Deqiu Chen
3. Xiumin Martin
4. Yujing Ma
5. Nianhang Xu

Citations in the corpus

• On the fast track: Information acquisition costs and information production (2020, background): “While there is some macro-level evidence that construction of transportation infrastructure promotes economic growth (Duranton and Turner 2012; Donaldson and Hornbeck 2016), the micro-level firm evidence has been limited, particularly in the context of financial markets.”
• Air pollution, affect, and forecasting bias: Evidence from Chinese financial analysts (2019, background): “1For the impact of corporate site visits in the China setting, see Cheng et al. (2016) and Han et al. (2018) for the effect on forecast accuracy, and Cheng et al.”
• Inside the “black box” of private in-house meetings (2018, unknown): “To be consistent with the literature on private in-house meetings (Soltes 2014; Solomon and Soltes 2015; Cheng et al. 2016), we focus on the largest two categories (in-house investor meetings and site visits).”