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

Sébastien Galanti, Aurélien Leroy and Anne-Gaël Vaubourg
Additional contact information
Aurélien Leroy: BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique
Anne-Gaël Vaubourg: CRIEF - Centre de recherche sur l'intégration économique et financière - Université de Poitiers

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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)
Date: 2022-03
New Economics Papers: this item is included in nep-cfn, nep-eur, nep-fdg and nep-isf
Note: View the original document on HAL open archive server: https://hal.science/hal-03621537v2
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Published in International Review of Financial Analysis, 2022, 81, pp.102108. ⟨10.1016/j.irfa.2022.102108⟩

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Journal Article: 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:hal:journl:hal-03621537

DOI: 10.1016/j.irfa.2022.102108

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