How Does Analyst Coverage Affect Corporate Social Responsibility? Evidence from China

Zheng, Lu; Guo, Xuemeng; Fu, Xiangfei

doi:10.1080/1540496x.2021.1952071

Cited by 8 publications

(4 citation statements)

References 35 publications

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“…Analyst coverage refers to the number of analysts who regularly follow a company and publish forecasts and recommendations (Hinze and Sump, 2019). As gatekeepers in the capital market, analysts integrate public and private information to perform financial forecasting for their clients, while using their information-access advantages and professional analytic skills (Lei et al, 2022). Analyst coverage appears to be an effective external mechanism to monitor firms (Hu et al, 2021;Yang et al, 2021a) and reduce information asymmetry (Naqvi et al, 2021;Luo et al, 2015;Jo and Harjoto, 2014) in financial markets.…”

Section: The Role Of Analyst Coveragementioning

confidence: 99%

“…Analyst coverage is a moderating variable measured by the number of analysts following a firm, similar to Hu et al (2021), Lei et al (2022), and Zhang et al (2015). Furthermore, a robustness analysis tests the effect of analyst coverage using two indicator variable-based sub-sample analyses: high analyst coverage and high recommendation counts.…”

Section: Empirical Measuresmentioning

confidence: 99%

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The Role of Analyst Coverage and Value- Relevance of Energy Efficiency

Khatri

2024

SSRN Journal

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Section: The Role Of Analyst Coveragementioning

confidence: 99%

Section: Empirical Measuresmentioning

confidence: 99%

The Role of Analyst Coverage and Value- Relevance of Energy Efficiency

Khatri

2024

SSRN Journal

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“…Analyst coverage refers to the number of analysts who regularly follow a company and publish forecasts and recommendations (Hinze and Sump, 2019). As gatekeepers in the capital market, analysts integrate public and private information to perform financial forecasting for their clients while using their information-access advantages and professional analytic skills (Lei et al , 2022). Analyst coverage appears to be an effective external mechanism to monitor firms (Hu et al , 2021; Yang et al , 2021b) and reduce information asymmetry (Naqvi et al , 2021; Luo et al , 2015; Jo and Harjoto, 2014) in financial markets.…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

“…Analyst coverage is a moderating variable measured by the number of sell-side financial analysts following a firm, similar to Hu et al (2021), Lei et al (2022), and Zhang et al (2015). Furthermore, a robustness analysis tests the effect of analyst coverage using two indicator variable-based sub-sample analyses: high analyst coverage and high recommendation counts.…”

Section: Data and Modelmentioning

confidence: 99%

The role of analyst coverage and value-relevance of energy efficiency

Khatri

2023

RAF

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Purpose The purpose of this study is to examine whether financial markets value a firm’s specific corporate environmental performance (CEP), i.e. its energy efficiency. This study also investigates the mechanism through which energy efficiency is associated with firm value. Design/methodology/approach For the empirical study, a sample of 324 US-listed non-financial firms during the period 2006–2019 was accessed from Thomson Reuters Refinitiv. Using baseline ordinary least squares regression models, this study first estimates the association between energy efficiency and firm value. It then tests the role of analyst coverage (the number of sell-side financial analysts following the firm) in ascertaining the value relevance of energy efficiency. To ensure the robustness of the results, alternative estimations including endogeneity and sample bias correctness tests were performed. Findings The study shows that energy efficiency is associated with firm value, and the role of analyst coverage as an external corporate governance mechanism is positive and significant on the value relevance of energy efficiency. Furthermore, this study documents that the relationship is shaped by sustainability-related internal and external risks, indicating that financial analysts’ role becomes more imperative when firms are subject to high scrutiny. Originality/value This study contributes to the literature by examining the intersections of energy efficiency, analyst coverage and firm value. It attempts to demonstrate how and why CEP and financial performance are linked. In the context of growing environmental concerns, the pressure of climate change and achievement of net-zero carbon emissions, this study provides valuable insights into the financial market wherein firms’ environmentally responsible behaviours are value-enhancing, and governance mechanisms are impactful. This study suggests that financial analysts can serve as an effective external corporate governance mechanism.

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