Investor attention and information diffusion from analyst coverage

This study examines the impact of investor attention and analyst coverage on the diffusion of information. Using trading turnover as a proxy for investor attention, the results show that attention is crucial to the information diffusion from financial analysts. The effect of analyst coverage on improving stock synchronicity is greater when investors are more attentive. Firms with less analyst coverage rely more heavily on investor attention to assimilate information. The lead–lag effect in high and low analyst-following firms is driven by the relative more attention given to firms that have high analyst coverage.