How do analysts affect corporate innovation? Evidence from site visits

Publication Type

Journal Article

Publication Date

9-2025

Abstract

While prior studies have examined whether financialanalysts affect corporate innovation, there is little researchon the mechanism through which this occurs. In this paper,we examine whether and how analysts’ questions aboutinnovation during site visits affect corporate innovation.Using a sample of corporate site visits in China, we findthat when analysts ask questions about innovation duringsite visits, firms invest more in R&D in the future. Consis-tent with knowledge diffusion across firms, this associationis stronger when analysts cover more firms in the sameindustry, when firms share similar technologies as industrypeers, and when an innovation-expert analyst is present atsite visits. We also find that analysts’ questions about inno-vation during site visits are positively associated with thequantity and quality of firms’ patent applications in thefuture. Overall, we provide evidence that analysts can affectcorporate innovation through their questions about firms’innovation activities.

Keywords

innovation, questions about innovation, R&D expenditures, site visits

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Contemporary Accounting Research

Volume

42

Issue

3

First Page

1528

Last Page

1556

ISSN

0823-9150

Identifier

10.1111/1911-3846.13032

Publisher

Wiley

Additional URL

https://doi.org/10.1111%2F1911-3846.13032

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