Analyst collaboration networks and earnings forecast performance

This study establishes extensive analyst collaboration networks based on the coauthorships of analysts' research reports in Chinese financial markets. We focus on the centrality of analysts' positions in the networks, which represents the information access at their disposal, and explore the relationship between analysts' network positions and their earnings forecast performance. We obtain robust evidence showing that analysts occupying a more central position in the collaboration networks produce more accurate earnings forecasts and that the improvements in forecast accuracy are applicable to all analysts regardless of their experience and industry specialty. We further find that collaborating with analysts who have superior ability or specialize in a given industry is more beneficial for the focal analysts to improve forecast accuracy. Moreover, the documented effects are more pronounced when earnings are more difficult to forecast. Finally, our evidence demonstrates that analysts with higher collaboration network centrality generally take a longer period of time to issue forecasts. The findings help to further our understanding of the spread of information among analysts and highlight the value of collaborations to work performance in knowledge-based industries.