Financial analyst coverage and corporate social performance: Evidence from natural experiments
研究发现，金融分析师带来的短期压力会减少企业对社会责任活动的投入；当分析师覆盖因券商合并或关闭而意外减少时，企业社会绩效反而提升。
Abstract Research summary This study examines the impact of financial analysts on a firm's corporate social performance (CSP). We integrate research on time horizons with stakeholder theory and argue that, in response to short‐term pressure from financial analysts, firms and their managers become more short‐term focused and limit investment in socially responsible activities. Using broker mergers and closures in the United States as exogenous shocks to analyst coverage and a difference‐in‐differences research design, we find that an exogenous decrease in analyst coverage leads to better CSP, establishing a causal relationship between analyst coverage and the level of a firm's CSP. The impact of financial analysts on a firm's CSP is exacerbated if the terminated analyst works for a larger brokerage house and has more general‐ and firm‐specific experiences. Managerial summary This study looks at the relationship between financial analysts, a key stakeholder group of the capital market, and a firm's socially responsible activities. Using a sample of U.S. publicly listed firms during the period of 2001–2013, our study finds novel evidence that the pressure to meet earnings target set by financial analysts hinders a firm's socially responsible performance. In addition, this pressure is more salient for firms with analysts that work for large brokerage houses and have more experiences. This study provides new insights to corporate social responsibility research by evaluating the impact of financial analysts on firms' social engagement.