Abstract
We uncover the information contained in institutional investors’ collective corporate visit behaviors, which is incremental to their private information privileges. Abnormal institutional visit (AIV) significantly predicts cross-sectional stock returns in a positive direction, consistent with the hypothesis that given short-sale constraints and limited resources, institutions systematically allocate more visit efforts to firms that they deem to have promising prospects. Moreover, such information is yet not effectively reflected in analyst forecasts until firms officially announce the earnings, suggesting limitations in the role played by sell-side analysts as intermediaries to convey information to the market.
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