Analyst Firm Coverage and Forecast Accuracy: The Effect of Regulation Fair Disclosure
研究了公平披露规则实施后，分析师覆盖更多公司反而能提高预测准确性，因为公共信息主导时产生规模经济效应，这对理解信息环境如何影响分析师行为有帮助。
In this study, we revisit the relationship between analyst firm coverage and forecast accuracy. In contrast to the proposed negative association in Clement (1999) owing to the portfolio complexity effect, we hypothesize an ‘economy‐of‐scale effect’ that is likely to dominate when analysts rely mostly on public information. In support of the latter effect, we find a positive association between firm coverage and forecast accuracy after the enactment of Regulation Fair Disclosure (Reg FD), which substantially reduces the flow of material private information to analysts. Such a result survives a battery of robustness analyses. We further show that, in the post‐Reg FD period, covering more firms increases an analyst's probability of being selected as a star analyst in the subsequent year. Overall, our findings highlight the importance of the information environment in shaping the economic link between an analyst's firm coverage and forecast accuracy.