Games for Attention: Evidence from Analysts’ Earnings Forecasts for US Listed Foreign Firms

Using the staggered hosting of Olympic Games as a shock to market participants’ attention to US listed foreign firms, we find that financial analysts tend to provide more accurate earnings forecasts for US listed foreign firms from Olympics‐hosting countries after their home countries host the Olympics. In particular, analysts who cover US‐listed foreign firms from both hosting and non‐hosting countries provide less accurate forecasts for those firms of lower relative importance from non‐hosting countries in their portfolios. Our cross‐sectional tests show that the effect of hosting the Olympics is more pronounced for firms with intensified media coverage, higher institutional ownership, more transparent information environments, and from Olympics‐hosting countries that are non‐English speaking, culturally distant from the US, and have non‐common law origins. Collectively, our findings provide novel evidence that prominent global sporting events can have a significant effect on the attention reallocation of foreign market participants, particularly financial analysts.