Regional Institutions, Financial Analysts and Stock Price Informativeness

Regional Studies, 2017 forthcoming

25 Pages Posted: 21 Feb 2013 Last revised: 22 Aug 2017

See all articles by Rong Ding

Rong Ding

University of Warwick

Wenxuan Hou

University of Edinburgh - Business School; Shanghai Lixin University of Accounting and Finance

Jing-Ming Kuo

University of Birmingham - Birmingham Business School

Edward Lee

University of Manchester - Alliance Manchester Business School

Multiple version iconThere are 2 versions of this paper

Date Written: August 22, 2017

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.

Keywords: Analyst; China; Legal Institutions; Stock Informativeness

JEL Classification: K00; G14; G30

Suggested Citation

Ding, Rong and Hou, Wenxuan and Kuo, Jing-Ming and Lee, Edward, Regional Institutions, Financial Analysts and Stock Price Informativeness (August 22, 2017). Regional Studies, 2017 forthcoming. Available at SSRN: https://ssrn.com/abstract=2221675 or http://dx.doi.org/10.2139/ssrn.2221675

Rong Ding

University of Warwick ( email )

Warwick Business School
University of Warwick
Coventry, CV4 7AL
United Kingdom

Wenxuan Hou (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom

HOME PAGE: http://www.wenxuanhou.com

Shanghai Lixin University of Accounting and Finance ( email )

Jing-Ming Kuo

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
University House
Birmingham, Birmingham B15 2TT
United Kingdom

Edward Lee

University of Manchester - Alliance Manchester Business School ( email )

Booth St. West (Crawford House)
Manchester, M15 6PB
United Kingdom

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