Analyst Following, Group Affiliation, and Labor Investment Efficiency: Evidence from Korea

Kyoungwon Mo and Kyung Yun (Kailey) Lee
Additional contact information
Kyoungwon Mo: School of Business Administration, Chung-Ang University, Seoul 06974, Korea
Kyung Yun (Kailey) Lee: College of Business Administration, Hankuk University of Foreign Studies, Seoul 02450, Korea

Sustainability, 2019, vol. 11, issue 11, 1-19

Abstract: This paper studies how analysts’ group affiliation affects firms’ labor investment efficiency. Using a 2001–2017 sample of Korean public companies, we find that labor investment efficiency increases when there are more unaffiliated analysts following business group (chaebol) firms. Our regression results also suggest that an increase in labor investment efficiency is attributed to a reduction in firms’ over-firing problem. However, affiliated analysts are not found to influence firms’ labor investment efficiency. We further document that the positive influence of unaffiliated analysts on labor investment efficiency holds when firms have high cash holdings. Our results are robust to different model specifications, including two-stage least square regression and firm-size matching.

Keywords: analyst following; group-affiliated analysts; chaebol; labor investment efficiency (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/11/3152/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/11/3152/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:11:p:3152-:d:237207

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().