The Role of Analysts in Intra-Industry Information Transfer

When a firm issues a management forecast, analysts who have observed more forecasts from this firm since covering it (i.e., have more MF-experience) subsequently improve their own accuracy more and provide timelier earnings forecasts for other (non–issuing) firms in the same industry. We also find that, subsequent to a management forecast, investors are more responsive to forecast revisions for non‐issuing firms made by analysts with more MF-experience. Further tests suggest that our results are not explained by endogeneity in firm coverage