Peer Effects of Corporate Disclosure in Pandemic Era

We show that a peer firm’s management forecast provides information for other firms in the same industry. Specifically, we show that a firm’s management forecast is positively associated with the stock return of other firms in the same industry. Furthermore, we show that such peer effect is observed when peer firms are the first disclosure company in the industry. We also find that the peer effect is more pronounced among firms with higher information asymmetry. Finally, we find that the peer effect is observed only in 2020 and not in other years between 2001 and 2019. Overall, the analysis provides strong evidence of peer effects under the COVID-19 pandemic period. This paper suggests that management forecast of peer firm plays a vital role as useful information set for investors that have limited access to public information due to the global pandemic.