Copyfrom：Dept. of Accounting Time：2020-09-11
Theme：Public Disclosure of Private Meetings and Market Participants' Attention Allocation
Coordinator：Brian Yutao Wang
Address：Room 1008, Mingde Business Building
In this paper, we investigate the consequences of increased transparency of private meetings on the attention allocation of market participants. Using the mandated timely disclosure requirement of corporate site visits by the Shenzhen Stock Exchange (SZSE) in China since July 2012 as a setting, we find that analysts who have not participated in the disclosed site visits switch their attention from firms that have hosted site visits to other peer firms in the same industry. These results are consistent with the conjecture that such transparency reveals the information advantage of the analysts who have participated in the disclosed site visits relative to other analysts. Cross-sectional analyses suggest that the effects are more pronounced when the potential information advantage is larger. We further document a reduction in the stock price synchronicity for those peer firms, suggesting that such transparency has positive spillover effects on peer firms' information environment by influencing analysts' attention allocation. Our paper has policy implications as it suggests that, despite the potential disclosure costs directly imposed on firms, firms collectively can benefit from this disclosure requirement due to the positive spillover effects.
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