The geographies of financial information and knowledge: a study of sell-side equity research

Thesis

This thesis investigates the geographies of financial information and knowledge as revealed through the geographies of a specific subset of financial professionals: sell-side equity research analysts. These are highly specialised information and knowledge intermediaries who use their individual expertise and accessed information to forecast the future performance of listed companies. Their geographies, therefore, provide insights into various topics including the distribution of tacit knowledge, and the role of proximity and face-to-face interaction in the transfer of information and specialised knowledge.

The research project consisted of two complementary workstreams which are summarised in three papers published in peer-reviewed journals and presented in chapters 4-6. Chapters 1 and 2 introduce and frame the overall research project, and chapter 7 concludes.

The first maps the geography of the sell-side equity research to reveal the distribution of specialised financial knowledge at the global scale. This is the first dataset, to the best of my knowledge, which reveals the global distribution of specialised financial expertise. It shows that specialised financial knowledge is highly concentrated and that information flows are often constrained by national borders. This also provides insights into the role that different financial centres play in information networks and hierarchies.

The second paper investigates the continued importance of face-to face interaction in the exchange of financial information, using the mobility and proximity restrictions implemented during the COVID-19 pandemic as a natural experiment. It found that virtual platforms were unable to replicate the benefits of face-to-face interaction, as demonstrated by a deterioration in analyst understanding of their covered corporates. This was especially the case for analysts dependent on information sources outside their own country.

The third paper examines how analysts acquire their specialised expertise. The initial transfer of knowledge is enabled through the acute proximity and intense interactivity enabled by office structures. This was demonstrated by the learning process being degraded during the COVID-19 pandemic work-from-home policies. As analysts develop their individual knowledge, however, they become more autonomous and sources outside the office become more important which are accessed through periods of temporary proximity.

Through these three papers, this thesis contributes methodologically and empirically to the existing literature on the geographies of financial information and knowledge. As outlined in chapter 7, the analysis provides novel insights applicable to the extant literature and empirically supports a number of existing conceptual frameworks. The thesis closes by identifying potential future research directions resulting from this analysis.

Authors: Bratton, W

• DOI: 10.5287/ora-2azjjzgzy
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Keywords: financial knowledge; face-to-face communication; financial centres; equity research; financial information; geographical proximity
• Subjects: Economic geography