Information Sharing and Spillovers: Evidence from Financial Analysts

Byoung-Hyoun Hwang, Jose Maria Liberti, Jason Sturgess

Research output: Working paper


We measure the effect of information sharing and spillovers on individual productivity in the context of financial analysts. Using firm mergers and acquisitions (M&A) as a source of variation that is exogenous to brokerage organization and analyst performance, we examine how within broker-analyst variation in firm coverage prior to the M&A affects post-M&A analyst forecast accuracy. We find that, on average, earnings forecast errors increase post-M&A. The decrease in performance is smaller when the analyst's own brokerage covers both the acquirer and target analysts are in the same locale, when peers are of greater quality, and when acquirer and target are in the same industry; the information sharing effects are weaker when there are greater coordination costs. Our findings highlight the importance of information spillovers across peers on individual productivity.
Original languageEnglish (US)
Number of pages42
StatePublished - Mar 2016


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