Speaker:Prof. Jin Wang (Wilfrid Laurier University)
?? Analysts’ Technological Expertise
? 12:00pm-13:30pm, 2018/5/14
? Room A619, Teaching A
Prof. Jin Wang (Wilfrid Laurier University)
Using patent distribution across different technology classes, we construct technological expertise for each analyst-firm pair based on the technological proximity between the firm and other firms covered by the analyst. We find that technological expertise increases the likelihood and timeliness for an analyst to cover a firm. It also increases earnings forecast accuracy and stock recommendation profitability, especailly for firms that rely more on technological innovation. Further analysis shows that technological expertise is distinct from industry specialization, and technological expertise could substitute industry specialization in analsyts’ coverage choices. Our findings suggest that technological expertise is a crucial component of analysts’ knowledge base, which has large impact on their coverage decisions and forecast performance.??