Cultural proximity and the processing of financial information

Qianqian Du, Frank Yu, Xiaoyun Yu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)


Foster School of Business, University of Washington 2017. This paper examines how culture affects information asymmetry in financial markets. We extract firms traded in the United States but headquartered in regions sharing Chinese culture (Chinese firms), and we manually identify a group of U.S. analysts of Chinese ethnic origin (Chinese analysts). We find that Chinese analysts issue more accurate forecasts on Chinese firms than non-Chinese analysts. The effect is stronger among firms with less transparent information environments. Further evidence suggests that cultural proximity can go beyond language commonality and analysts' pre-existing channels for information. Market reaction is stronger when Chinese analysts issue favorable forecast revisions or upgrades about Chinese firms.
Original languageEnglish
Pages (from-to)2703-2726
Number of pages24
JournalJournal of Financial and Quantitative Analysis
Issue number6
Publication statusPublished - 1 Dec 2017

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


Dive into the research topics of 'Cultural proximity and the processing of financial information'. Together they form a unique fingerprint.

Cite this