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- Publisher Website: 10.1016/j.jfineco.2021.06.025
- Scopus: eid_2-s2.0-85109450858
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Article: On the Fast Track: Information Acquisition Costs and Information Production
Title | On the Fast Track: Information Acquisition Costs and Information Production |
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Authors | |
Keywords | Information acquisition Acquisition cost Information production Information quality Soft information Sell-side analysts Price efficiency |
Issue Date | 2022 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfec |
Citation | Journal of Financial Economics, 2022, v. 143 n. 2, p. 794-823 How to Cite? |
Abstract | Using the introduction of high-speed rail (HSR) as an exogenous shock to costs of information acquisition, we show reductions in information-acquisition costs lead to (i) a significant increase in information production, evidenced by a higher frequency of analysts visiting portfolio firms and (ii) improvement in output quality, manifested in higher forecast accuracy and better recommendations. The effect is more pronounced for firms with information that is difficult to produce. Importantly, more information production is also associated with improved price efficiency. We corroborate these findings using a large-scale survey of financial analysts. Finally, both the empirical and survey results highlight the importance of soft information in analysts’ unique-information production. |
Persistent Identifier | http://hdl.handle.net/10722/300993 |
ISSN | 2023 Impact Factor: 10.4 2023 SCImago Journal Rankings: 13.655 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chen, D | - |
dc.contributor.author | Ma, Y | - |
dc.contributor.author | Martin, X | - |
dc.contributor.author | Michaely, R | - |
dc.date.accessioned | 2021-07-06T03:13:03Z | - |
dc.date.available | 2021-07-06T03:13:03Z | - |
dc.date.issued | 2022 | - |
dc.identifier.citation | Journal of Financial Economics, 2022, v. 143 n. 2, p. 794-823 | - |
dc.identifier.issn | 0304-405X | - |
dc.identifier.uri | http://hdl.handle.net/10722/300993 | - |
dc.description.abstract | Using the introduction of high-speed rail (HSR) as an exogenous shock to costs of information acquisition, we show reductions in information-acquisition costs lead to (i) a significant increase in information production, evidenced by a higher frequency of analysts visiting portfolio firms and (ii) improvement in output quality, manifested in higher forecast accuracy and better recommendations. The effect is more pronounced for firms with information that is difficult to produce. Importantly, more information production is also associated with improved price efficiency. We corroborate these findings using a large-scale survey of financial analysts. Finally, both the empirical and survey results highlight the importance of soft information in analysts’ unique-information production. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfec | - |
dc.relation.ispartof | Journal of Financial Economics | - |
dc.subject | Information acquisition | - |
dc.subject | Acquisition cost | - |
dc.subject | Information production | - |
dc.subject | Information quality | - |
dc.subject | Soft information | - |
dc.subject | Sell-side analysts | - |
dc.subject | Price efficiency | - |
dc.title | On the Fast Track: Information Acquisition Costs and Information Production | - |
dc.type | Article | - |
dc.identifier.email | Michaely, R: ronim@hku.hk | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jfineco.2021.06.025 | - |
dc.identifier.scopus | eid_2-s2.0-85109450858 | - |
dc.identifier.hkuros | 323219 | - |
dc.identifier.volume | 143 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 794 | - |
dc.identifier.epage | 823 | - |
dc.identifier.isi | WOS:000743964200008 | - |
dc.publisher.place | Netherlands | - |