Do local analysts know more ? A cross-country study of the performance of local analysts and foreign analysts

@inproceedings{Bae2007DoLA,
  title={Do local analysts know more ? A cross-country study of the performance of local analysts and foreign analysts},
  author={Kee-Hong Bae and Ren{\'e} M. Stulz and Hongping Tan},
  year={2007}
}
This paper examines whether analysts resident in a country make more precise earnings forecasts for firms in that country than non-resident analysts. Using a sample of 32 countries, we find an economically and statistically significant local analyst advantage even after controlling for firm and analyst characteristics. The local advantage is high in countries where earnings are smoothed more, less information is disclosed by firms, and firm idiosyncratic information explains a smaller fraction… CONTINUE READING
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