Security analysts' earnings forecasting performance based on information transmission network

Security analysts' research reports are important information resources in financial markets. To investigate the relationship between information connection among analysts and earnings forecasting performance, we construct an information transmission network based on all research reports issued on stocks of Shanghai Stock Exchange and Shenzhen Stock Exchange from 2008 to 2016. Visual network figure presents the change of analysts' network position during the sample period. Moreover, information connection stability is defined to assess network stability, which is negatively correlated with stock market volatility. Empirical results show that analysts with a more central position in the network will get better earnings forecasting performance with less forecasting volatility and higher forecasting accuracy. (C) 2018 Elsevier B.V. All rights reserved.