The Impact of Reduced In-Person Contact on Information Quality: The Case of Analyst Forecast Accuracy During COVID Lockdowns

This paper examines whether and how in-person communication influences the quality of information available to market participants. We utilize the lockdown periods during the COVID-19 pandemic as a proxy for an exogenous reduction in in-person communication, and analyst forecast accuracy as a proxy for information quality. We document that when firms’ headquarter states undergo lockdowns, analyst forecasts for these firms issued in the lockdown periods are significantly less accurate than for other firms or other periods, with an average difference of about 8% of the mean value of absolute forecast errors. The difference is also greater when analysts have less firm-specific experience or cover more industries, or when firms are smaller or younger. Supplemental analyses show greater differences when companies convert from in-person to virtual events despite holding more of the latter. In addition, analysts input more effort and display more divergent opinions during the lockdown periods. The collective results indicate that when there is less in-person communication, forecast quality is lower despite more effort and similar or higher frequency of virtual communication.

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Publication Details

Journal
Journal of Accounting Auditing & Finance
Published
2026-06-24
DOI
https://doi.org/10.1177/0148558x261464667
Primary Topic
COVID-19 Pandemic Impacts
Type
article
Field-Weighted Citation Impact
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article

The Impact of Reduced In-Person Contact on Information Quality: The Case of Analyst Forecast Accuracy During COVID Lockdowns

Trent Krupa, Yanhua Sunny Yang, Xiao Yu
Journal of Accounting Auditing & Finance
COVID-19 Pandemic Impacts
article

The Impact of Reduced In-Person Contact on Information Quality: The Case of Analyst Forecast Accuracy During COVID Lockdowns

Trent Krupa, Yanhua Sunny Yang, Xiao Yu
article en

Abstract

This paper examines whether and how in-person communication influences the quality of information available to market participants. We utilize the lockdown periods during the COVID-19 pandemic as a proxy for an exogenous reduction in in-person communication, and analyst forecast accuracy as a proxy for information quality. We document that when firms’ headquarter states undergo lockdowns, analyst forecasts for these firms issued in the lockdown periods are significantly less accurate than for other firms or other periods, with an average difference of about 8% of the mean value of absolute forecast errors. The difference is also greater when analysts have less firm-specific experience or cover more industries, or when firms are smaller or younger. Supplemental analyses show greater differences when companies convert from in-person to virtual events despite holding more of the latter. In addition, analysts input more effort and display more divergent opinions during the lockdown periods. The collective results indicate that when there is less in-person communication, forecast quality is lower despite more effort and similar or higher frequency of virtual communication.

Journal of Accounting Auditing & Finance
Pennsylvania State University (US), University of Connecticut (US)
Openalex Percentile: Top 3%
COVID-19 Pandemic Impacts
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