Regional institutions, financial analysts and stock price informativeness

Rong Ding, Wenxuan Hou, Jing-Ming Kuo, Edward Lee

Research output: Contribution to journalArticlepeer-review

Abstract

This paper investigates the impact of legal institutions on the external governance role of equity analysts in enhancing the corporate information environment. By analysing a sample of Chinese listed firms between 2003 and 2013, we find that analyst coverage is positively related to stock price informativeness. Firms located in provinces where legal institutions are stronger, as indicated by better development of market intermediaries and lower levies and charges on firms, are less likely to withhold value-relevant information. Financial analysts play a more effective role in improving stock informativeness in provinces with less developed legal institutions.
Original languageEnglish
Pages (from-to)1-10
JournalRegional Studies
Early online date5 Oct 2017
DOIs
Publication statusE-pub ahead of print - 5 Oct 2017

Keywords

  • analyst
  • China
  • legal institutions
  • stock informativeness

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