Do Analysts Provide More Effective Information Or Noise For R&D-intensive Companies?

The level of stock price synchronization is one of the indicators to measure the efficiency of capital market.Regarding its causes,there are two views including“information efficiency” and “irrational behavior”.For different R&D investment intensities companies,the view that their stock price synchronization differences are more in line with what kind of view is still not conclusive.Moreover,in China,how do analysts,as an information intermediary between companies and investors,affect the synchronicity of stock prices in different R&D investment intensities companies,provide investors with more effective information,or noise? This question has important practical and theoretical significance.Based on the perspective of stock price synchronicity,this paper combined theoretical analysis and empirical research,selected all listed companies in China from 2007 to 2015 and tried to find out analysts provide more effective information or noise for R&D-intensive companies.The empirical results show that the greater R&D input intensity,the lower the stock price synchronicity.And there are more tracking analysts for greater R&D input intensity companies.That is to say,for different R&D intensities companies,the “irrational behavior” perspective of stock price synchronization is more explanatory,and analysts are willing to keep track of R&D-intensive companies.Furthermore,analysts' coverage increases the negative relationship between R&D investment intensity and share price synchronicity.This relationship characterized by analysts exacerbating investors' irrational investment behaviors and the abnormal fluctuation of stock price,which in turn,reduces the stock price synchronicity,rather than by companies changing their R&D activities due to the pressure of analysts.It reveals that analysts could provide noise rather than effective information for R&D-intensive companies.The conclusion is reliable during both the current period and the next period.