The Impact of Analyst Coverage on Corporate Innovation: A Literature Review

DOI

10.2991/aebmr.k.220307.400How to use a DOI?

Keywords

Analyst coverage; Innovation; Corporate governance

Abstract

This literature review examines the impact of analyst coverage on corporate innovation. The effect of analyst coverage has been discussed more frequently in recent years with the development of social media. Financial analysts play an essential role as information intermediary agents and monitoring forces, effectively affecting corporate earning management, social responsibility, and equity valuation. Previous studies adopt different approaches, including OLS and 2SLS regression, and conclude the causal relationship between analyst coverage and those factors. Influencing factors on corporate innovation are also evaluated in terms of internal factors such as agency problem, firm structure, tolerance for early failure, as well as external factors including competition, labour laws, bankruptcy codes, hostile takeover, and governance provisions. More importantly, this review summarizes existing literature that investigates the relationship between analyst coverage and corporate innovation. Overall, the relation is discussed from the opposite perspectives. In short, analyst coverage has a “pressure effect” that impedes innovative activities and an “information effect” that fosters innovative actives.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Zihui Huang
PY  - 2022
DA  - 2022/03/26
TI  - The Impact of Analyst Coverage on Corporate Innovation: A Literature Review
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 2443
EP  - 2448
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.400
DO  - 10.2991/aebmr.k.220307.400
ID  - Huang2022
ER  -