Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 27, 2022 erstellt
Description:
This paper examines the role of information spillovers within analysts’ portfolio in improving analyst forecast accuracy. We show a positive intra-portfolio information spillover effect, that is, the management earnings forecasts issued by large firms can reduce analysts forecast errors on the corresponding small firms within the same analyst portfolio. We find greater spillover effects if the portfolio firm linkages are stronger, if analysts are more experienced, and if small firms face greater uncertainty. We also show that the spillover effect is through the information environment mechanism as information asymmetry of small firms is significantly reduced thanks to information spillovers. Moreover, we document the consequence of information spillovers, that is, the market reacts stronger to analyst forecast revisions with information spillovers. Finally, we provide evidence showing that such intra-portfolio spillover effect is asymmetric, where there are only large-to-small but no small-to-large information spillovers