The scarcity of suitable proxies for asymmetric information has impeded empirical research from providing reliable evidence on whether information risk shapes equity pricing. In re-examining this unresolved question, we rely on firms' geographic distance from financial centers to gauge...

Using a large sample of target price forecasts for 6,415 U.S. firms from 1999 to 2011, we find that target price changes predict institutional trading, even after we control for changes in both stock recommendations and earnings forecasts. The impact of target price changes is economically...