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Do Corporate Site Visits Impact Stock Prices?

Author

Listed:
  • Qiang Cheng
  • Fei Du
  • Brian Yutao Wang
  • Xin Wang

Abstract

We examine the stock price impact of corporate site visits using a unique data set of site visits to listed firms in China. Our main findings are as follows. First, the market reaction around corporate site visits is statistically and economically significant and is stronger for group visits, visits conducted by mutual fund managers, visits covering accounting and finance topics, visits to firms with poor information environments, and visits to manufacturing firms. Second, the stock returns around site visits are positively associated with firms’ future performance. Third, the changes in visiting funds’ holdings are more predictive of firms’ future performance than those of nonvisiting funds. Overall, this study contributes to the literature by providing evidence that site visits are important venues for investors to collect information about firms and make informed trades. Les visites sur place de sociétés ont‐elles une incidence sur le cours des actions? Les auteurs analysent l'incidence des visites sur place de sociétés sur le cours des actions au moyen d'un jeu unique de données relatives aux visites sur place de sociétés cotées en Chine. Leurs principales observations sont les suivantes: premièrement, la réaction du marché à proximité des visites sur place de sociétés est statistiquement et économiquement significative et plus marquée dans le cas de visites collectives, de visites dirigées par les gestionnaires de fonds communs de placement, de visites portant sur des sujets comptables et financiers, de visites sur place de sociétés dont l'environnement d'information est déficient et de visites d'entreprises de fabrication; deuxièmement, le rendement des actions à proximité des visites sur place de sociétés est en relation positive avec la performance future des sociétés; et troisièmement, les changements dans les participations détenues par les fonds visiteurs sont plus aptes à permettre de prédire la performance future des sociétés que les changements dans les participations détenues par les fonds non visiteurs. Dans l'ensemble, l’étude enrichit la documentation en démontrant, preuves à l'appui, que les visites sur place de sociétés sont d'importants déplacements grâce auxquels les investisseurs peuvent se renseigner sur les entreprises et prendre des décisions éclairées quant à leurs opérations.

Suggested Citation

  • Qiang Cheng & Fei Du & Brian Yutao Wang & Xin Wang, 2019. "Do Corporate Site Visits Impact Stock Prices?," Contemporary Accounting Research, John Wiley & Sons, vol. 36(1), pages 359-388, March.
    • Handle: RePEc:wly:coacre:v:36:y:2019:i:1:p:359-388
    DOI: 10.1111/1911-3846.12417
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    References listed on IDEAS

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