“Private Interaction with Management: Evidence from Textual Analysis of Analyst Reports”
Utilizing textual analysis tools on financial analysts’ reports, we aim to identify private interactions between the analysts and the management team of firms they follow, and then examine the determinants and consequences of such private interactions. On one hand, private interaction with management might give financial analysts access to better information and improve their forecasting performance. On the other hand, analysts may be misled by or collude with the firm’s management. Our preliminary evidence suggests the bright side of private interactions outweighs the dark side. That is, financial analysts who have private interactions with the management tend to make more accurate forecasts and produce more detailed reports. Our research will have implications for corporate investor-relation practices and capital market regulations.
Prof. Tan is principal investigator with Prof. Ma as co-investigator on this grant.
Supported in part by funding from the Social Sciences and Humanities Research Council.
En partie financé par le Conseil de recherches en sciences humaines.