TY - JOUR
T1 - Firms’ innovation strategy under the shadow of analyst coverage
AU - Guo, Bing
AU - Toldrà-Simats, Anna
AU - Pérez-Castrillo, David
N1 - Funding Information:
We thank an anonymous referee, Fred Bereskin, Hila Fogel-Yaari, Beatriz Garc?a-Osma, Mar?a Guti?rrez, Antoine Loeper, In?s Macho-Stadler, Eduardo Melero, Manuel N??ez-Nickel, Neus Palomeras, Silvina Rubio, Pablo Ruiz-Verd? Antonio V?zquez-L?pez, David Wehrheim, and participants at seminars at University Carlos III de Madrid, Universit? de Caen, and University College Dublin, at the Fifth Barcelona GSE Workshop on Economics of Science and Innovation, at the Tenth Annual Conference on Innovation Economics at Northwestern University, at the VIII Annual Conference of the Spanish Association of Law and Economics, at the Second Entrepreneurial Finance Conference, and at the 2017 Annual Meeting of ASSET for very useful comments. This work was supported by the Ministerio de Econom?a y Competitividad and Feder (ECO2015-68715-R), (ECO2015-63679-P), (ECO2013-45864-P), and (ECO2012-36559), Generalitat de Catalunya (2014SGR-142), ICREA Academia, Severo Ochoa Programme (SEV-2015-0563), the Community of Madrid and the European Social Fund S2015/HUM-3353 (EARLYFIN-CM), the Ramon Areces Foundation, and FEDER UNC315-EE-3636.
Funding Information:
We thank an anonymous referee, Fred Bereskin, Hila Fogel-Yaari, Beatriz García-Osma, María Gutiérrez, Antoine Loeper, Inés Macho-Stadler, Eduardo Melero, Manuel Núñez-Nickel, Neus Palomeras, Silvina Rubio, Pablo Ruiz-Verdú, Antonio Vázquez-López, David Wehrheim, and participants at seminars at University Carlos III de Madrid, Université de Caen, and University College Dublin, at the Fifth Barcelona GSE Workshop on Economics of Science and Innovation, at the Tenth Annual Conference on Innovation Economics at Northwestern University, at the VIII Annual Conference of the Spanish Association of Law and Economics, at the Second Entrepreneurial Finance Conference, and at the 2017 Annual Meeting of ASSET for very useful comments. This work was supported by the Ministerio de Economía y Competitividad and Feder (ECO2015-68715-R), (ECO2015-63679-P), (ECO2013-45864-P), and (ECO2012-36559), Generalitat de Catalunya (2014SGR-142), ICREA Academia, Severo Ochoa Programme (SEV-2015-0563), the Community of Madrid and the European Social Fund S2015/HUM-3353 (EARLYFIN-CM), the Ramon Areces Foundation, and FEDER UNC315-EE-3636.
Publisher Copyright:
© 2018 Elsevier B.V.
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 2019/2
Y1 - 2019/2
N2 - We study the effect of analyst coverage on firms’ innovation strategy and outcome. Using data of US firms from 1990 to 2012, we find evidence that an increase in financial analysts leads firms to cut research and development expenses, acquire more innovative firms, and invest in corporate venture capital. We attribute the first result to the effect of analyst pressure and the others to the informational role of analysts. We also find that financial analysts encourage firms to make more efficient investments related to innovation, which increases their future patents and citations and influences the novelty of their innovations.
AB - We study the effect of analyst coverage on firms’ innovation strategy and outcome. Using data of US firms from 1990 to 2012, we find evidence that an increase in financial analysts leads firms to cut research and development expenses, acquire more innovative firms, and invest in corporate venture capital. We attribute the first result to the effect of analyst pressure and the others to the informational role of analysts. We also find that financial analysts encourage firms to make more efficient investments related to innovation, which increases their future patents and citations and influences the novelty of their innovations.
KW - Corporate venture capital
KW - Innovation
KW - Acquisition
KW - Financial analysts
UR - https://dialnet.unirioja.es/servlet/articulo?codigo=6830317
UR - http://www.scopus.com/inward/record.url?scp=85052917824&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2018.08.005
DO - 10.1016/j.jfineco.2018.08.005
M3 - Article
AN - SCOPUS:85052917824
SN - 0304-405X
VL - 131
SP - 456
EP - 483
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 2
ER -