Analyst Coverage, Forecasting Bias, and Corporate Innovation: Evidence from China
查看参考文献97篇
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文摘
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Due to information asymmetry and strategic innovation, firms often encounter challenges related to insufficient driving forces and low-quality innovation outcomes. Analysts always act as information intermediaries who help foster the advancement of corporate innovation activities and the conversion of innovation output. This study examines the impact of analyst coverage and forecasting bias on corporate innovation, employing data from China A-shared listed firms spanning the period 2007 to 2019. We measure corporate innovation from two perspectives: Input and output. Specifically, we use the ratio of research and development (R&D) expenditure to sales as a proxy for the innovation input and the number of patent citations excluding self-citations to measure innovation output. We find that analyst coverage promotes corporate innovation, which is consistent with the “bright” side of analyst coverage. However, the positive effect of analyst coverage hinges on effectively transmitting and disclosing accurate information to investors in the capital market. Based on this, analysts’ forecasting bias includes forecasting dispersion and optimism bias. We find evidence that an increase in analysts’ forecast dispersion leads to a decrease in corporate innovation quality. Moreover, this paper presents a novel approach by employing the regression discontinuity method to examine the effect of analyst optimistic bias on firm innovation. The empirical findings reveal that overly optimistic forecasts by analysts exacerbate innovation quality. These analyses enrich the research on analyst coverage and corporate innovation, providing an empirical basis for improving the capital market with the help of analysts. |
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来源
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Journal of Systems Science and Information
,2024,12(1):1-24 【核心库】
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DOI
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10.21078/JSSI-2023-0063
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关键词
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analyst coverage
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forecasting bias
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corporate innovation
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innovation quality
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地址
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1.
School of Economics and Management, University of Chinese Academy of Sciences, Beijing, 100049
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School of Finance, Nankai University, Tianjin, 300071
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Institutes of Science and Development, Chinese Academy of Sciences, Beijing, 100190
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语种
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英文 |
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文献类型
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研究性论文 |
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ISSN
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1478-9906 |
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学科
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社会科学总论 |
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文献收藏号
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CSCD:7681592
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