Forecasting Earnings from Home

We examine the impact of working from home (WFH) practices on the financial services industry, focusing on sell-side equity analysts. We find that analysts who previously benefited from access to in-person interactions with other informed parties experience a greater decline in earnings forecast accuracy following the COVID lockdown and the shift to WFH. Notably, the informational advantage associated with the in-person access disappears during the lockdown and returns once restrictions are lifted. Our results are stronger for all-star analysts and analysts with shorter coverage periods, suggesting that all-star analysts rely relatively more on access to in-person interactions prelockdown and that accumulated firm-specific knowledge mitigates the loss of in-person interactions. Our results remain robust across alternative analyst performance measures. We conclude that, despite recent advances in communications technology, AI, and machine learning, in-person interactions remain a unique and difficult to substitute information channel for sell-side research providers and that WFH impedes information flows between market participants in capital markets. This paper was accepted by Suraj Srinivasan, accounting. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2024.04637 .

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Publication Details

Journal
Management Science
Published
2026-02-09
DOI
https://doi.org/10.1287/mnsc.2024.04637
Primary Topic
Auditing, Earnings Management, Governance
Type
article
Field-Weighted Citation Impact
0.00
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article

Forecasting Earnings from Home

Michael T. Durney, Hoyoun Kyung, Jihwon Park, Stanimir Markov
Management Science
Auditing, Earnings Management, Governance
article

Forecasting Earnings from Home

Michael T. Durney, Hoyoun Kyung, Jihwon Park, Stanimir Markov
article en

Abstract

We examine the impact of working from home (WFH) practices on the financial services industry, focusing on sell-side equity analysts. We find that analysts who previously benefited from access to in-person interactions with other informed parties experience a greater decline in earnings forecast accuracy following the COVID lockdown and the shift to WFH. Notably, the informational advantage associated with the in-person access disappears during the lockdown and returns once restrictions are lifted. Our results are stronger for all-star analysts and analysts with shorter coverage periods, suggesting that all-star analysts rely relatively more on access to in-person interactions prelockdown and that accumulated firm-specific knowledge mitigates the loss of in-person interactions. Our results remain robust across alternative analyst performance measures. We conclude that, despite recent advances in communications technology, AI, and machine learning, in-person interactions remain a unique and difficult to substitute information channel for sell-side research providers and that WFH impedes information flows between market participants in capital markets. This paper was accepted by Suraj Srinivasan, accounting. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2024.04637 .

Management Science
University of Iowa (US), Baruch College (US), The University of Texas at Dallas (US), University of Missouri (US)
Industry, innovation and infrastructure
Openalex Percentile: Top 62%
Auditing, Earnings Management, Governance
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Forecasting Earnings from Home — Michael T. Durney, Hoyoun Kyung, et al. · Management Science (2026) | TGRS Research Map | TGRS