Increase Or Decrease Holding Of Insurance Capital,Analysts' Following And Analysts' Forecast Bias

With the lack of supervision,how stakeholders induce the unethical behavior of security analysts has attracted the attention of scholars.At present,insurance capital's the frequent turnover has a significant negative impact to the stability of stock market,inducing the scold of "barbarians" and "vermin" by the regulators.But how frequently increase or decrease on share holding by insurance capital influences analysts'independence is relatively opaque,and its mechanism needs further mining.Based on the information asymmetry theory,principal-agent theory and behavioral finance theory,this paper selects domestic listed companies in the first three quarters of 2012-2016 as the research sample,using Lang and Landholm(1996)'s method to construct the regression model and analyst forecast deviation index to explore the influence of insurance capital's increase or decrease of share holding on the behavior of analysts' following and analysts' forecast deviation,while controlling the company's financial risk,the level of information disclosure and earnings predictabilities.The results shows that listed companies in the current insurance capital will cause analysts to give more follow-up,and insurance capital's increasing holding of listed companies has no significant impact on analysts' earnings forecasts,but the insurance capital's decreasing holdings of listed companies will lead to a more optimistic earnings forecast by analysts.There are two innovations in this paper.First,the influence of institutional ownership on analysts' independence in foreign countries has a lot of research results.However,the sample selected in these research are mostly in Europe countries,where the institutional environment of Europe countries is quite different from that of China.In this paper,based on the domestic environment,the existence of this kind of influence is verified,which is helpful to provide a basis for regulatory reform.Second,the academic research on the economic consequences of the increase and decrease of the insurance capital's holding is mainly based on the theoretical analysis,lacking of empirical research results,this paper helps to fill this gap.