Jarrad Harford's webpage

What Do Questions Reveal? The Detection, Recognition, and Implications of Topic-Specific Expertise in Capital Markets

Abstract:
We provide a generalizable methodology to identify analysts’ topic-specific expertise based on their past earnings conference call questions. When their topic-specific expertise aligns with the content of new information, such expertise leads to more accurate forecasts, more influential stock recommendations, and better career prospects. While analyst expertise diversity improves the ability of prices to reflect future earnings, it discourages buy-side participation in earnings conference calls and weakens corporate investment sensitivity to stock prices.