Social Environment And Analyst Behavior

As an important market intermediary,the information released by analysts is one of the basis for investors' decisions.Both practical experience and academic theory show that analysts are important to the efficiency of capital market,so their behavior has always been the focus of academic attention.Previous studies have found that the characteristics of analysts,securities firms and target companies all have important influence on their behaviors.There's little doubt that the social environment as an important interactive objects and constraints of analysts,may also play an important role,but now there is few academic research.A small amount of researches mainly focus on the short-term impact of the external environment,they rarely notice that social environments,such as cultures,may have long-term effects.Based on this,this paper studies the influence of social environment on the behavior of analysts during their growing period.Specifically,this paper selects three dimensions of social environment for research,namely,"universal" social environment,"community immersion" social environment,and "community spillover" social environment.This study can not only make up for the lack of attention to social environment in the existing analyst literature,but also tries to explore the functional boundary of social environment,which plays an important role in improving the research system of analysts.Specifically,first of all,this article uses the social environment of hometown attachment to study the impact of a "universal" social environment on analyst behavior.This article finds that analysts' sentiment towards their hometown will cause them to have a desire to protect their hometown.When air pollution in their hometown is more serious,they will give a more pessimistic assessment of the "culprit" of pollution.We find that when analysts' home towns are polluted,their EPS forecasts for heavy polluters are more pessimistic,their bold positive forecasts are fewer,and their ratings are more pessimistic.At the same time,we also found that the above effects are affected by the characteristics of individual analysts,analysts' hometowns,and target companies.They are more pronounced among male analysts and analysts who have suffered major environmental accidents in their hometowns.They are more pronounced among companies with worse environmental CSR and higher forecast complexity.Finally,we also find that when analysts' hometown air pollution is severe,the accuracy of analysts' predictions for heavily polluting companies is significantly reduced,and the information content of positive earnings revisions for heavily polluting companies is significantly increased,and the information content of negative earnings revisions is decreased significantly.Secondly,this article uses the social environment of gender discrimination to study the impact of "community immersion" social environment on analyst behavior.The ratio of male to female births in prefecture-level cities is used to measure the degree of gender discrimination.The study finds that when male analysts grew up in a region with high gender discrimination,their predictions are more optimistic,deviates more from consensus expectations and are less accurate.In addition,the article also finds that gender discrimination experience exacerbates the difference of male and female analysts.Specifically,male analysts are more optimistic,deviates more from consensus expectations and are less accurate than female analysts,and the difference is more significant when the analyst comes from a region with high gender discrimination.Finally,this article also finds that the gender discrimination culture in the analyst's hometown is significantly positively related to the timeliness of male analysts' predictions and the BHAR of negative earnings revisions,but negatively related to the BHAR of positive earnings revisions.Finally,this article first uses the social environment of the gambling culture to study the impact of the "community spillover" social environment on analyst behavior.This paper measures the gambling culture by the number of gambling cases per capita in prefecture-level cities.The study finds that if the analysts grew up in the region with a strong gambling culture,they will issue bold forecasts more(includes positive bold forecasts and negative bold forecasts),and their predictions are more accurate,which to some extent indicates that these bold forecasts are the disclosure of private information,rather than pure gambling behavior.Further research finds that the gambling culture is more conducive to the private disclosure of information by inexperienced analysts,which is reflected in the increased boldness and accuracy of forecasts.At the same time,when the forecast complexity of the target company is high,the influence of gambling culture on the accuracy is greater,which indicates that when the company is more uncertain,the analyst's "spirit of risk" is more needed.Finally,this paper finds that the gambling culture leads analysts to predict less based on heuristic information,which manifests in less self-herding and less rounded forecasts.The research in this paper has important theoretical value.On the whole,this paper not only improves the analyst research system,but also expands the relevant literature on social environment and imprinting effects.Specifically,previous studies on analysts,scholars mainly focused on the characteristics of analysts at the level of individuals and securities firms,while this paper mainly focuses on the social environment during the growth period of analysts.The results show that the social environment has important effects on analyst behavior,which is a powerful supplement to the analyst literature and has high academic value.Secondly,this article studies the three dimensions of the social environment.The scope and mechanism of social environment are different in each dimension.Through the study of these three dimensions,it is helpful to further clarify the function mechanism of social environment,which is of enlightening significance to explore the function boundary of social environment.In addition,previous scholars have found that past experiences have an important impact on people's behavior.At the micro level,scholars are now focusing more on the impact of early career experiences.It is important to note that the experience of growing up is also very important,because it is a sensitive period for the formation of character,thinking patterns,etc.Based on the study of the social environment during the analyst's growth period,this paper enriches the literature of "imprinting theory" and social environment.Finally,the research on each sub-question of this article has enriched the literature on home attachment,gender discrimination,behavioral differences between men and women,and gambling culture,which has high academic value.Finally,the research of this paper also has important practical significance.First of all,in recent years,China has repeatedly emphasized the role of capital market in economic development.As an important information intermediary,analysts are of great significance to maintain the efficiency of capital market.The systematic study of analysts' behaviors in this paper is helpful for capital market to understand and distinguish analysts' behaviors,and for investors to make better use of the information released by analysts.Secondly,this paper finds that the social environment and the internal characteristics of individuals are the same important factors affecting the efficiency of analysts' prediction.Therefore,for regulatory agencies such as CSRC,they should create a good external environment for analysts while requiring them to improve their own quality.