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Article
Are Investors' Corporate Site Visits Informative?
Research Collection School Of Accountancy
  • Qiang CHENG, Singapore Management University
  • Fei Du, University of Hong Kong
  • Xin WANG, University of Hong Kong
  • Yutao WANG, Central University of Finance and Economics
Publication Type
Working Paper
Publication Date
6-2013
Abstract

Corporate site visit is an important type of investors’ information acquisition activities, but its usefulness is not well understood in the literature, partially due to the lack of data. Using a unique dataset of corporate site visits in China, we analyze the information content and the determinants of corporate site visits. Our main findings are as follows. First, we document a significant market reaction to corporate site visits and the market reaction is stronger for group visits, for visits conducted by mutual fund managers, for visits covering firm-specific topics, and for firms with poorer information environment. Second, we find that stock returns around site visits are positively associated with forthcoming earnings news, suggesting that corporate site visits enable investors to obtain information predictive of future earnings. Lastly, consistent with the cost and benefit of conducting site visits, investors are more likely to conduct site visits to profitable firms, firms with more business segments, firms with a higher market share, and firms located closer to economic centers. Additional tests indicate that site visits represent selective access events, not selective disclosure events. Overall, our study contributes to the literature by presenting the first systematic evidence on the information role of corporate site visits.

Keywords
  • Corporate site visits,
  • selective access,
  • selective disclosure,
  • information acquisition,
  • investors
Discipline
Creative Commons License
Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International
Citation Information
Qiang CHENG, Fei Du, Xin WANG and Yutao WANG. "Are Investors' Corporate Site Visits Informative?" (2013)
Available at: http://works.bepress.com/qiang-cheng/9/