 The bright side of analyst coverage on corporate innovation: Evidence from ChinaPing Zhang and Yiru Wang International Review of Financial Analysis, 2023, vol. 89, issue C Abstract: Using a sample of A-share listed companies in China from 2007 to 2019, we investigate the effect of analyst coverage on corporate innovation. We find that analyst coverage will promote corporate innovation, supporting the information hypothesis. We also discuss possible mechanisms of how analyst coverage increases innovation. The information and monitor effects are two plausible channels that allow analyst coverage to promote innovation. Heterogeneity analysis shows the positive relation is more pronounced in non-SOEs, in higher intellectual property protection regions. And considering the firms' life cycle, we find firms in the growth and maturity stage are more vulnerably affected by analysts. Further investigation reveals a positive relationship between analyst coverage and external innovation, and the increased innovation ultimately translates into the long-term value of firms. Our research enriches the impact of analyst coverage on innovation and provides new empirical evidence to improve the multi-level capital market. Keywords: Analyst coverage; Corporate innovation; Information hypothesis; Pressure hypothesis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:89:y:2023:i:c:s1057521923003071 DOI: 10.1016/j.irfa.2023.102791 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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