The Peer Effect Of Corporate Finance Policy

Corporate financial policies are important tools used by the company to regulate and control financial conditions.The choice of financial policy affects the company's operational efficiency and determines the company's financial goals.In recent years,the economic uncertainty in China has increased,and the role of information in the development of corporate financial policies has become more important.Peer companies have become more and more important as a channel for transmitting information.Although scholars at home and abroad have reached consensus on the issue of peer-to-peer transmission of corporate financial policies,their research is mostly carried out by the peer effect of chained directors,same industry,and same location.They lack the research of peer effect built on common analysts.So does the peer effect exist in a social network built with a common analyst? Does this peer effect affect the choice of corporate financial policies? It seems that relevant scholars still lack sufficient research on these issues.In theoretical research,information is an important consideration in the formulation of financial policies by listed companies,and the peer effect can deliver public information to peers in a social network.This effect can alleviates information asymmetry and contribute to corporate finances.Analysts are important information mediators.The social networks they construct should have more powerful information transmission functions.In summary,peer effects built by analysts can ease information asymmetry in the process of information transfer,and the acquisition of peer information will ultimately affect the choice of company's financial policies.In the empirical approach,this paper uses the analyst's new perspective as a link to build a social network,uses an adjacency matrix to express social network relationships,and improves the CAPM model used by Leary and Roberts(2014)to obtain a characteristic equity shock.Using the Shanghai-Shenzhen A share panel data from 2008 to 2016,we investigated whether there is an endogenous peer effect in market leverage,net debt issuance,net equity issuance and M&A transactions in a social network with common analysts.This paper finally finds that the peer effect exists in the social network constructed by the common analysts,and the peer effect can reduce the information asymmetry in the market through the conduction of information,and ultimately affect the choice of the company's financial policy.Specifically,there are endogenous peer effects of market leverage and net equity issuance.A 1% increase in market leverage of the peer company will result in a 0.769% increase in target company.A 1% increase in the probability of a company's share issue will increase the probability that the target company will issue shares by 0.435%.This article also finds that the larger the analyst's securities company size,the stronger the peer effect of the stock issuance decision disseminated by the analyst.