Research On The Influence Of Analyst Coverage On Enterprise Innovation

Enterprise innovation is the key to cultivating new drivers of real economic growth and enhancing the market competitiveness of enterprises.As an important part of the capital market,the main role of analysts is to improve the information asymmetry of enterprises,form external supervision of enterprises,and improve the allocation efficiency of capital market resources,so analysts’ attention may affect enterprise innovation,thereby affecting the development of the real economy.However,the existing literature has not reached a consensus on the role of analyst attention in the process of enterprise innovation,and some scholars believe that analyst attention will cause management short-sightedness and hinder enterprise innovation.Some scholars believe that analysts focus on helping enterprises innovate and develop by improving information asymmetry and easing financing constraints.In this context,it is important to explore the impact of analyst attention on enterprise innovation.Based on the sample data of A-share listed enterprises in China from 2003 to2021,this paper uses the least squares virtual variable method(LSDV)to empirically test the impact and specific mechanism of analysts’ attention on enterprise innovation,so as to reveal the role of capital market in enterprise innovation and development.This paper further examines the differences in the impact of analysts’ attention on firm innovation from the perspectives of financing constraint,nature of enterprise property rights and analyst reputation.The conclusions of this paper are as follows:(1)The sample regression results show that analyst attention has a significant role in promoting enterprise innovation.(2)The regression results of the mechanism test show that analysts’ attention can alleviate information asymmetry,improve the external financing environment of enterprises,and improve the willingness and ability of enterprises to innovate.At the same time,analysts focus on the ability to form external oversight of managers’ behavior,mitigate managers’ short-sightedness,and mitigate the negative impact of agency problems.(3)The positive impact of analysts’ attention on enterprise innovation is more significant in enterprises with serious financing constraints.Enterprises with severe internal financing constraints face high external financing costs,so the marginal effect of the change in the number of analyst teams focusing on enterprises in the current period is more obvious for enterprises with serious financing constraints.(4)Considering the influence of the nature of property rights,the group regression results show that among non-state-owned enterprises,analysts’ attention has a stronger role in promoting enterprise innovation.Compared with non-state-owned enterprises,state-owned enterprises can obtain government policy support and financial subsidies,and managers are usually appointed by the government or inherited by families,and the performance pressure is relatively light,so analysts pay attention to the promotion of non-state-owned enterprises’ innovation output.(5)Analyst reputation can enhance the positive impact of analysts’ attention on corporate innovation.Star analysts attract widespread attention from market investors through reputation models and information models,which can help enterprises obtain more external financing,thereby promoting the further improvement of enterprises’ innovation capabilities.