Analyst Coverage And Stock Return

Analysts play an important external oversight role in the field of corporate governance.Analyst coverage enhances company value and improving capital market efficiency.Existing scholars generally agree that the heterogeneity of analysts will affect the effectiveness of analyst coverage,but most of the previous research has focused on the heterogeneity of personal attributes such as gender,age,and predictive ability of analysts.Heterogeneity of social attributes is underreported.The network relationship has a certain network structure.in reality analyst groups are indeed affected by each other.Therefore,,we cannot ignore the impact of analysts' network relationships and social attributes on their analysis and decision-making.Taking the 33,469 annual samples of 3,362 non-financial and non-public utility listed companies in China's A-share market from 2001 to 2018 as the total sample,this paper examines the hierarchical network characteristics of analysts through network topology analysis and examines on this basis Analysts are concerned about the impact on stock returns and the role of analysts' network characteristics in the above-mentioned impact mechanisms.research shows:First,analysts focus on improving the company's internal control or the external supervision,which has increased the stock return.Second,among listed companies with relatively good internal controls,such as low shareholding ratio of the largest shareholder,high proportion of non-stateowned enterprises,and independent directors,analyst coverage improve stock return.The positive effect is more obvious,which is reflected in the analyst coverage improve company's internal control.Third,in the study of the impact mechanism of external oversight,those with relatively poor external oversight,such as a small number of news media reports and a low number of shareholding organizations,analysts are better able to exert their external oversight role to further tap the company 's information and improve the company's transparency.Fourth,the degree of centrality and clustering of analysts connected through analyst reports are due to the close connection between analysts,which increases the possibility of analysts 'interest transfer,which negatively affects the relationship.The relationship of the rate undermines analyst's ability.Fifth,network relevance damages analysts in those good internal control and good external supervision.Network information isolation plays a more active role in the case of analysts taking advantage of the trend,and the closeness of analysts is harmful when the analysts are in a situation of contrarian.