The Effect of Analyst Following on Corporate Inefficient Investment Using Regression Analysis

Chao Fan; Qinglian Ma; Lingling Ouyang; Yejuan Zhong

doi:10.54691/bcpbm.v27i.1947

Authors

Chao Fan
Qinglian Ma
Lingling Ouyang
Yejuan Zhong

DOI:

https://doi.org/10.54691/bcpbm.v27i.1947

Keywords:

analyst following; corporate inefficient investment; external supervision; audit quality; firm leverage

Abstract

Contemporarily, analyst following and inefficient investment are the general concern of the company’s management, which is necessary to investigate the relationship between them. We select 2012-2017 Chinese A-share listed companies as the research object to obtain sample data, design a regression model which contains seven variables and use Stata software to analysis it, get the impact of analyst following on corporate inefficient investment. Based on the analysis, analyst following will reduce the level of corporate inefficient investment, which is still valid after a series of robustness tests. Besides, the results of heterogeneity analysis show that the impact of analyst following on corporate inefficiency investment is more obvious in companies with high leverage and low audit quality. This article provides suggestions for corporate governance and has practical significance for improving the level of enterprise resource allocation.

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