Does Industrial Agglomeration Affect The Accuracy Of Analysts' Earnings Forecasts?

In China,the unbalance of geographical distribution of economic activities is an important feature of modern economic growth,and a large number of industrial agglomeration areas with industrial clusters have accordingly emerged,which have made important contributions to regional economic development.This paper takes Chinese a-share listed companies from 2003 to 2017 as samples to study the influence of industrial agglomeration on the accuracy of analyst earnings forecast.This paper finds that industrial agglomeration can significantly improve the accuracy of analysts' earnings forecast by reducing the information asymmetry,which is more obvious in state-owned enterprises.Further,analysis shows that the improvement of industrial agglomeration level affects the accuracy of analyst's earnings forecast mainly in the pessimistic forecast.In addition,this paper matches the data of Special Economic Zones with the longitude and latitude data of enterprises,and finds that policy-based industrial agglomeration has a greater impact on the accuracy of analysts' prediction.This paper has enriched the literature on influencing factors of analyst's prediction behavior.In the existing research,the role of external environment in analyst's prediction has not been paid enough attention.This paper studies the influence of the external environment of industrial agglomeration on the accuracy of analysts' prediction and its internal mechanism.In addition,it also investigates the heterogeneity of the influence of industrial agglomeration on the accuracy of analysts' earnings prediction,which is conducive to the understanding of analysts' prediction behavior.In addition,this paper advances the role of industrial agglomeration in the capital market participants.Agglomeration is the most prominent geographical features,economic activity in the past about literature in the role of industrial agglomeration in the capital market participants are mostly focused on enterprise's financing constraints and innovation,to a certain extent,ignored the industrial concentration on the behavior of another important subject in the capital market participants-the influence of the securities analysts,accordingly,also ignore the effect of industrial agglomeration of information disclosure.The study of this paper can be an important supplement in this respect to better understand the role of industrial agglomeration in the capital market participants.The study of this paper can be used for reference by analysts and government regulators of the Special Economic Zones.In terms of analysts,under the premise that the capital market effectiveness in China still needs to be further improved,analysts should take the initiative to dig out more private or public information.When following up the target enterprises,we should make full use of the advantages of external economy,such as industrial agglomeration,and give play to the economies of scale effect of analysts.In terms of Special Economic Zones government regulators,the current policy of "Policy Rent" advantage showed a trend of gradually decreasing,the government regulators should actively guide the Special Economic Zones to establish an orderly capital market mechanism,optimize the environment of system and competition system,and guide the enterprise in the Special Economic Zones improving production and operation,perfecting the information disclosure and so on,further transfer the development of economies of scale and synergy effect.