Research On The Impacts Of Analyst Coverage On Corporate Financialization

With the development of economic globalization and neoliberalism,the expansion of financial capital has accelerated globally,and the financialization trend of China’s economy has become increasingly obvious.From the micro level,the prominent manifestation of economic financialization is the financialization of real enterprises,which is directly reflected in the rising proportion of financial assets and financial profits within enterprises.More and more non-financial enterprises are deeply involved in the financial market,and financial channels have become their main profit model.The "transformation from real to virtual" of real enterprises hinders the high-quality development of the national economy and increases the risk of economic operation.At the level of corporate governance,agency conflicts caused by the separation of powers system are considered to be an important reason for the financialization of real enterprises.Therefore,how to curb the financialization trend of real enterprises through good corporate governance deserves our in-depth consideration.Some studies have mostly examined the financialization of enterprises from the perspective of internal governance,but the cognition of external governance is still insufficient.The principal-agent theory holds that analysts,as information intermediaries in the capital market,play an important role in the external governance of enterprises.Based on the market mechanism of securities analysts,this thesis studies the impacts of analyst coverage on the financialization of enterprises and its mechanism.Firstly,at the level of theoretical analysis,the relevant literature is sorted out,and the causes of corporate financialization and the internal mechanism of analyst coverage to affect corporate financialization are analyzed from the efficient market theory,information asymmetry theory and entrusted agent theory.In addition,this thesis also introduces the scenarios of profit-seeking motivation,executive financial background and debt level,and specifically analyzes the differentiated impact of analyst coverage on corporate financialization in different scenarios.Secondly,the relevant data of China’s Shanghai and Shenzhen A-share listed companies from2007 to 2021 are selected to empirically test the theoretical analysis part,in order to draw the research conclusion of this article.The research results show that:(1)The increase of analyst coverage has a significant negative impact on the level of corporate financialization.Among them,reducing agency costs and stimulating enterprise innovation are the specific paths that analyst coverage affects the level of corporate financialization.(2)In companies with stronger profit-seeking motivation,executives with financial backgrounds and lower levels of debt,the role of analysts in inhibiting the level of corporate financialization is more prominent.Finally,using the research conclusions and combining the actual situation,feasible suggestions are put forward for alleviating the financialization of real enterprises.In the process of preventing the virtualization of the real economy,it is necessary to attach importance to the external governance effectiveness of securities analysts,and fully leverage their positive role in promoting enterprises to focus on industry and boost high-quality development of the national economy.This thesis adds the direct research on analyst coverage and enterprise financialization,expands the breadth and depth of analysts’ research on external governance,enriches the research on the influential factors of corporate financialization at the governance level,and provides useful reference for consolidating and strengthening the real economy with the help of market forces.