The Impact Of Analyst Coverage On Corporate Financialization

Under the "de-leverage and stable growth" situation in China,corporate financialization has already squeezed out a few of the real economy.At the same time,the number of analysts and the quality of their reports are constantly rising.As key players in the capital market analysts play an increasingly important role in economic development.This paper combs through the relevant literatures on the two major causes of financialization and the four mechanisms by which analysts' coverage impact corporate governance,and analyzes and discusses the role Analysts' coverage plays in the process of corporate financialization.By sorting out the causes of financialization,two important assumptions of this paper are put forward: corporate management has incentives to allocate a large number of short-term financial assets,and it is easy to fall into a vicious circle;external supervision and effective information disclosure can effectively suppress such management behavior.On this basis,this paper summarizes the impact of analysts' coverage on corporate financialization into two "inverted U-shaped" theories: corporate governance theory and information disclosure theory.This paper uses 2009-2018 listed A-share companies as a research sample to demonstrate the relationship between analysts' coverage and corporate financialization through empirical methods,and further verifies the mechanism of analysts' coverage on corporate financialization,and the different strength of the impact by different mechanisms.The main conclusions of this paper are: 1)Analysts' coverage can effectively suppress corporate financialization through supervision and intermediary mechanisms;2)The effect of Analysts' coverage is stronger in companies with lower information asymmetry,more complete corporate governance mechanisms,and higher information disclosure quality;3)Analysts' coverage impacts corporate financialization,the effect of impact is stronger and more significant in the supervision mechanism than in the intermediary mechanism.At present,there are few literatures that discuss the relationship between analysts' coverage and corporate financialization behavior.Through empirical analysis,this paper deepens the theoretical research of analysts' coverage to the role of corporate governance,and at the same time broadens the related research on the causes of corporate financialization.It provides empirical evidence for the mechanism of Analysts' coverage.