A Study On The Impact Of Buy-side Analysts' Site Visit On Stock Price

Institutional investors are the main participants in the capital market and their investment decisions are based on the findings and investment advice of the buy-side analysts.The judgment of the buy-side analyst on the value of the firm is more directly reflected in the stock price.The sell-side analyst not only writes the research report,but also through roadshows persuades the institutional investor to invest.The sell-side analyst income comes from the fund commission sub-positions.While the buy-side analyst mainly provides investment advice for the company,and their income is linked with institutional investment income.Although they are both analysts,the work of the form and methods are similar,there are significant differences between sell-side analysts and buy-side analysts.So the literature conclusions for the sell-side analyst are not fully applied to the buy-side analyst.The research report of the buy-side analyst is a trade secret and not publicly available.If we want to know their investment tendencies,we have to think from an indirect way.Considering that corporate site visit is an important and costly type of analysts' information acquisition activities.The buy-side analyst always covers a large number of industries and companies,and they don't have enough time to visit every company.So buy-side analysts choose company of interest to conduct a site visit,which means they think the selected company has potential investment value.So,we using a dataset of corporate site visits(the total number of participating institutional investors)to reflect the potential investment intentions of institutional investors.We use the event research method to study whether site visit has effect on the company's stock.Through the existence and size of excess returns,and whether it can continue to reflect the buy-side analysts' research capacity and institutional investors' impact on the market.Our findings suggest that site visit inviting many institutional investors could have significant effect on stock price,which can provide an excess return of 1.29% on the visit day,and the cumulative abnormal return will reach the top,3.16% after nine days.This paper supports the efficient information hypothesis,for the 31 days' cumulative abnormal return still exists.The selective site visit reflects institutional investors' potential investment intention.The conclusion of this paper affirms the buy-side analyst' ability of information mining and analysis,and the market investors could obtain abnormal return when investing refer to information of selective site visit.