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Investment and access to external finance in Europe: Does analyst coverage matter?

Sébastien Galanti, Aurélien Leroy and Anne-Gaël Vaubourg

International Review of Financial Analysis, 2022, vol. 81, issue C

Abstract: We aim to determine whether analyst coverage improves European firms’ access to capital markets and investment. Based on a data set that includes firms from several European countries between 2000 and 2015, we implement a treatment effect framework and an instrumental variables (IV) approach, in which the intensity of industry-level waves in coverage is used as an instrument for firm-level coverage. We show that analyst coverage is favorable to firms’ debt and share issuance and their investment expenses. Our paper emphasizes the key role of financial analysts in improving European firms’ financial conditions.

Keywords: Investment; Debt issuance; Share issuance; Analyst; Coverage (search for similar items in EconPapers)
JEL-codes: G23 G31 G32 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Investment and access to external finance in Europe: Does analyst coverage matter? (2022) Downloads
Working Paper: Investment and access to external finance in Europe: Does analyst coverage matter? (2022) Downloads
Working Paper: Investment and access to external finance in Europe: Does analyst coverage matter? (2022) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:81:y:2022:i:c:s1057521922000758

DOI: 10.1016/j.irfa.2022.102108

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