Emprical Research Of Analyst Following And Corporate Governance Factors

In the traditional efficient market theory, securities analysts are often considered to be fully rational individuals. They promote the efficient allocation of market information and standardize the market. However, as a Social Man, analyst will be essentially influenced by both internal and external effects, and the deviations between their conclusions and the truth are often very high.So far, although China's securities analysts has more developed in both level of theory and practice than ever before, they still fall behind the mature Western analysts. In addition, our corporate governance structure has many specific characteristics compared to the West structure. This study will conduct our analysts and corporate governance theory together to study how the composition of each variable factors in corporate governance mechanism affect the behavior analysts following, and to seek answers whether a certain factors by the corporate governance would impact the external supervision, and thus play a role in raising the value of the company and so on.This study found that analysts prefer to follow companies with a high proportion of institutional investors holding, information disclosure system, good management condition and large-scale. Those effects, such as stock equity concentration degree and small shareholders, protection mechanisms, seem not to improve the analysts' interests. In addition, the study also found that analysts rely on institutional investors to play a role of external supervision, then improving the structure of inside corporate governance.