Institutional investor information network, analyst forecasting and stock price crash risk

Xiao Li Gong*, Jia Liu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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Abstract

In this paper, we construct the information network of fund investors based on the theory of social relationship networks and examine its impact of fund information sharing with analysts on stock price crash risk. Our results show that private information sharing among institutional investors reduces crash risk. Further results show that fund information sharing can alleviate analyst optimism bias and improve analyst forecast accuracy, which further reduces stock price crash risk. Moreover, these identified effects are more pronounced in a bull market than a bear market. Our study contributes to the research on private information transmission in fund information networks, and provides a new perspective for recognizing the relationships among institutional investor behavior, analyst forecasting, and stock price crash risk.

Original languageEnglish
Article number101942
JournalResearch in International Business and Finance
Volume65
DOIs
Publication statusPublished - 10 Apr 2023

Keywords

  • Analyst optimism bias
  • Crash risk
  • Fund information network
  • Information sharing

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