It has been widely recognized that firms’ environmental, social, and governance (ESG) performances are crucial for shaping their information environments. Nonetheless, the impact of ESG performances on important analyst report attributes still remains clear. Our study reveals that superior firm. ESG performances significantly enhance the analyst report readability. The mechanism analysis demonstrates that this effect is primarily driven by increased information accessibility (the information acquisition channel) and greater analysts’ research efforts (the analyst effort channel). As expected, this effect is more pronounced in firms operating in highly polluted industries, firms with opaque financial infomration and state-owned enterprises (SOEs). Finally, our findings reveal that the release of analyst reports triggers higher market reactions for firms with superior ESG performances. In overall, our study highlights the criticial role of firm ESG performances in boosting financial analysts’ information production process.

This study examines the relationship between industry litigation risk and corporate misconduct using China's A-share listed companies’ data from 2007 to 2022. The findings indicate a significant and negative association, where companies in industries with higher median litigation amounts relative to their assets exhibit reduced incidents of misconduct. This suggests that businesses in high-risk litigation sectors may adopt more cautious practices to mitigate legal challenges and protect their reputations. The robustness of these findings is confirmed through a variety of tests, including a quasi-experimental setting of the chief judges rotation implemented in 2008. Furthermore, the study finds that external monitors including financial analysts’ site visits and local law firms moderate the negative relationship between litigation risk and misconduct. We further show that legal enforcement and moral capital are the two channels through which industry litigation risk impacts corporate misconduct. Our findings underscore the role of litigation risk in shaping peer firms' behavior.

Site visits allow visitors to physically inspect productive resources and interact with onsite employees and executives face-to-face. We posit that, by allowing visitors to acquire investmentrelated information and monitor the management team, site visits offer disciplinary benefits for corporate investments. Using mandatory disclosures of site visits in China, we find that corporate investments become more responsive to growth opportunities as the intensity of site visits increases, consistent with the notion that site visits yield disciplinary benefits. We also find that the positive association between site visits and investment efficiency is more pronounced when visitors can glean more investment-related information and when they have stronger incentives and greater power to monitor managers. This positive association is also stronger among firms with more severe agency problems and higher asset tangibility. The overall evidence supports the notion that site visits serve as a unique venue for institutional investors and financial analysts to acquire valuable information and serve a monitoring function, which generates disciplinary benefits for corporate investments.

This paper examines analysts’ catering behavior to current investor demand proxied by the unbalanced stock market reactions towards optimistic forecasts and nonoptimistic forecasts (optimism premium). Using data on earnings forecasts issued by Chinese sell-side analysts during the period 2014-2018, we find that optimism premium significantly increases analysts’ tendency to issue optimistic forecasts, in other words, analysts do cater to investor demand. Implications for theory and practices are discussed.

The increasing awareness and adoption of technology, particularly artificial intelligence, are reshaping industries and daily life. This study explores how adopting artificial intelligence (AoAI) influences stock price crash risk for Chinese A-share listed companies between 2010 and 2020. The primary findings emphasize AoAI's significant role in reducing stock price crash likelihood, enhancing financial market performance, and mitigating manager opportunism. Further, the research identifies varied effects of AoAI on crash risk among different enterprise types, notably benefiting non-state-owned and non-foreign businesses. Additionally, the study finding supports the notion that financial analysts enhance transparency, reducing the risk of stock price crashes. These results underscore the Chinese government's role in shaping the digital economy. Overall, the study's findings remain consistent and robust across statistical methods like 2SLS, PSM, SysGMM, and instrumental variable analysis.

During the past decade, Wechat-public-accounts (WPAs) have gained increasing popularity as a novel tool for voluntary disclosure among Chinese public firms. This paper examines whether WPA disclosures provide value-relevant information to the market. Using a topic model to process over 1.6 million WPA articles during 2012-2020 and an event study design, we find that the stock market reacts strongly following a WPA disclosure event and the magnitude varies with the topic and textual feature of the WPA articles. We further present evidence that firms use their WPAs to provide new information rather than reinforce information that is already presented in other channels. Moreover, financial analysts, journalists, and retail investors rely on corporate WPAs for their information production. Collectively, our findings indicate that corporate WPAs are an economically significant source of new information for market participants that supplement traditional disclosure channels considered in prior studies.

In the new wave of sustainable finance, firms are under increasing pressure from stakeholders to engage in ESG activities, among which the role of financial analysts is a key driving factors of corporate sustainability. This paper investigates the effect of analyst coverage on corporate environmental, social, and governance (ESG) performance. Using the dataset of listed firms in China from 2009 to 2020, we find that analyst coverage significantly improves the target firm’s ESG scores. We validate three non-mutually exclusive channels through which analyst coverage encourages ESG engagement: (1) encourage firms’ awareness on ESG issues via ESG-oriented information production; (2) alleviate ESG undervaluation and strengthen the financial relevance of ESG performance; (3) mitigate financial constraints to support corporate ESG activities. We establish causality with an instrumental variable estimation and a difference-in-differences approach. Our findings highlight the information intermediary role of financial analysts in driving corporate sustainability.

How to shape a firm’s stock price resilience in the increasingly uncertain environment has become an important topic. This paper investigates the effect of important market participantsfinancial analysts-on stock price resilience. Based on data from 3,444 listed firms from China, we find that firms with higher analyst coverage are more resilient during the Covid-19 induced crisis, which is manifested by a lower pandemic-induced decline in stock price, shorter duration of decline period, higher recovery probability, and shorter duration of the recovery period after the shock. This positive relationship is more prominent for small firms but does not depend on ownership type, and the ratio of star analyst coverage. Further channel tests show that analysts could help in attracting attention from media and institutional investors, improving corporate governance, and reducing financial constraints, which in turn enhance the ability of stock prices to absorb pandemic shocks.