I Think What You Think: Trade Fairs and the Exchange of Firms' Beliefs

Does interaction between firms lead to a streamlining of expectations? We test for the existence of a so-far ignored channel of expectation formation and diffusion by matching a regular Austrian business survey on firm expectations with the schedule and confirmed exhibitors at trade fairs. We find that in the month after a firm has exhibited at a trade fair, its production expectations react stronger to consensus expectations than in other months. We thus provide first micro-level evidence suggesting that firms' beliefs are shaped by information from other firms with whom they meet and potentially trade.