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How Does Analyst Coverage Influence Corporate Leverage Adjustment: Evidence from China.
- Source :
- Emerging Markets Finance & Trade; 2022, Vol. 58 Issue 13, p3881-3897, 17p, 8 Charts
- Publication Year :
- 2022
-
Abstract
- This study investigates the influence of analyst coverage on corporate leverage adjustment (CLA) in China. We analyzed 26,673 firm-year observations from the Shanghai and Shenzhen stock exchanges from 2000 to 2020 and found that analyst coverage had a negative impact on CLA, which was stronger in firms with poor performance. We posit that analyst forecast divergence and pressure-induced managerial myopia are possible mechanisms through which analyst coverage influences CLA. Our study contributes to the dynamic trade-off model literature by demonstrating that analyst coverage is also a determinant of CLA. Furthermore, our findings help regulators and investors to comprehensively understand the role of analysts in emerging markets. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 1540496X
- Volume :
- 58
- Issue :
- 13
- Database :
- Complementary Index
- Journal :
- Emerging Markets Finance & Trade
- Publication Type :
- Academic Journal
- Accession number :
- 159983881
- Full Text :
- https://doi.org/10.1080/1540496X.2022.2073815