Research On The Influence Of Analyst Earnings Forecast On Corporate R&D Investment

In a fiercely competitive and dynamically changing global market,enterprise technology has been fleetly changing,its products have been rapidly updated,and the market demands are increasingly diverse.In the face of the ever-changing market environment,companies should constantly improve their competitiveness to occupy a favorable competitive position.With the rapid development of science and technology,technological innovation has increasingly become the vital force to promote the efficient operation of the real economy and improve the competitiveness of enterprises.Technological innovation is conducive to improving corporate production efficiency and market benefits,while the driving force for enterprises to carry out technological innovation is their R&D capability.Since R&D investment is a key indicator of corporate R&D capability,multitudinous domestic and foreign scholars have conducted in-depth research on the influencing factors of enterprise R&D investment and confirmed that the information environment of enterprises have great impact on R&D investment.In the process of improving corporate information disclosure,the role of information intermediaries in the market is indispensable.However,as a crucial information intermediary in the capital market,securities analysts have received less attention from scholars.In the wake of the advance and growth of China's capital market in the past three decades,the analyst industry has also gone through a period from budding to normalization.Compared with the mature capital markets in the West,the information disclosure system of China's listed companies is still to be improved.The corporate information disclosure has some issues,including imperfect content,delayed disclosure and even whitewash of financial statements,which has deepened the extent of information asymmetry between enterprises and investors.Against this background,the securities analysts have been playing a significant intermediary part in satisfying the investors in China's capital market.Hence,China's analyst industry has emerged and developed promptly.Analysts are playing the positive role of information intermediary and corporate governance,which has been confirmed by current researches.However,high analyst coverage will also have negative impact on the companies.Based on the two major theories about the influence of analyst coverage on corporate R&D investment,this paper further conducts empirical research on the impact of behavior and quality ofanalyst earnings forecast on corporate R&D investment.The earnings forecasting behavior is measured by analyst optimism,and the quality of the earnings forecasting is measured by analyst forecast error and dispersion.In order to verify the two different impact path,this paper carried out group tests according to the management tenure and whether chairman and general manager held by the same person.Ultimately,this paper draws the following conclusions:First,analyst optimism correlates with corporate R&D investment significantly and negatively,which indicates that the behavior of analyst earnings forecast has an adverse effect on corporate R&D investment.Second,analyst forecast error and dispersion both correlates with corporate R&D investment significantly and negatively,which indicates that the quality of analyst earnings forecast correlates with corporate R&D investment positively.Third,the negative correlation between analyst optimism and corporate R&D investment is weakened by extended management tenure,which signifies that managers' short-sighted behavior induced by their career concern is a significant way to restrain corporate R&D investment caused by analyst optimism.Fourth,chairman and general manager held by the same person alleviates the negative effect of analyst optimism,forecast error and dispersion on corporate R&D investment,which manifests that managers' short-sighted behavior and corporate financing constraints caused by information asymmetry are transmission paths of negative effect.