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Cross-Border Information Exchange and Analyst Forecasts

Speaker:  Dr. Yi XIANG,  The Hong Kong Polytechnic University 

Moderator: Chen ZHAO, Associate Professor, School of Accounting

Time: 15:00-16:30 , Apr. 13, 2021

Platform: Tencent Meeting 215 122 897 

Organizers: School of Accounting, Research Office

Speaker's Profile

Dr. Yi XIANG is a Research Assistant Professor at the School of Accounting and Finance of The Hong Kong Polytechnic University. He received his PhD in Accounting from the University of Queensland in 2020. He previously received a master's degree in advanced accounting from the University of Queensland and a bachelor's degree in finance from Zhongnan University of Economics and Law. Dr. XIANG's research interests include financial accounting, auditing and corporate finance. His papers are currenly under review by The Accounting Review, Review of Financial Studies, Journal of Accounting and Economics, Review of Accounting Studies and other international journals.

Lecture Preview

We examine the effect of cross-border regulatory cooperation and information exchange on analyst earnings forecasts. Using the staggered entry of foreign countries into the Multilateral Memorandum of Understanding (MMoU) as a shock to analysts’ information environment, we find that firms cross-listed in the U.S. show a greater level of analyst following and a significant reduction in analyst forecast error and dispersion after their foreign home countries join the MMoU. Furthermore, the effect of the MMoU on analysts tends to be stronger for cross-listed firms with a greater level of information opacity, for analysts with greater difficulty forecasting cross-listed firms, and for industries/analysts covering a greater number of firms that receive comment letters from the Securities and Exchange Commission. Collectively, our findings support the conjecture that enhanced cross-border information exchange achieved by closer cooperation between securities regulators has a positive effect on analysts’ information environment.