Travel restriction and analysts' information acquisition and production

Using the exogenous disruption of the Covid-19 pandemic, we examine the specific channels through which financial analysts acquire information during corporate site visits: the fundamental information learning channel and the earnings information leakage channel. Employing a difference-in-differences approach, we find a marked decrease in forecast accuracy among analysts who previously relied on site visits compared to those who did not, suggesting that the fundamental information learning channel contributes significantly to the improvement in analysts' forecast accuracy associated with site visits. Consistent with the importance of the fundamental information learning channel, we document that this effect is more pronounced for less transparent firms, firms with higher operational uncertainty, and solo analysts relative to analyst teams. Additionally, we demonstrate that analysts increased their online conference attendance when unable to conduct site visits. However, our evidence shows that online conferences cannot fully compensate for the information loss resulting from the absence of site visits, indicating the unique and irreplaceable informational value of in-person site visits.