We examine proprietary research produced by buy-side analysts working for a large fund management company. We find that the buy-side research has investment value for a one-year horizon, and the analysts producing this research exhibit differential ability that tends to persist over time. The...

We examine the response of investment to peers' stock prices. While the response to average peer-Q is typically positive, the response to prices of peer firms that are more threatening and those of industry leaders is reliably negative. The responses are more strongly negative when the prices...

We show empirically that firms' investment responds to innovations in stock prices of peer firms. This response is stronger and more positive when peer firms have greater informed trading and more informative prices. We also find higher competition, faster growth, greater correlation in...