Research On The Effect Of Analysts’ Forecasts On Corporate Financial Constraints

Financing is one of the primary economic activities,and it is directly related to the future development of the enterprise.However,when Chinese enterprises seek outside capital support,they generally suffer from financial constraints.Information asymmetry increases the external financing costs,and it is the main reason for financial constraints.Therefore,the key to solve this problem is to improve the efficiency of information on disclosure,transmission,interpretation,and feedback.As a information intermediary on the capital market,analysts build a bridge of information communication between the enterprises and investors.They are the important readers and communicators about the enterprises’ information,who can use their dual advantages on information collection and analysis,and finally predict the future profitability of the enterprises.As a kind of incremental information on the market,analysts’ forecasts can reveal the enterprises’ information environment condition,and also can carry on the early warning of the investment risk,affecting the investors’ risk assessment and value judgment.In recent years the analyst team is growing constantly,and analyst industry also is gradually standardized and specialized.what role have analysts played on the capital mark? What’s the impact of analysts’ forecasts on the corporate financing activities? Based on our country’s institutional environment,this paper will examine the function of analysts’ forecasts.Regarding 2009-2014 A-share listed companies in our country as the research sample,this paper will put analysts’ forecasts and corporate financial constraints into a research framework,discussing how analysts’ forecasts influence the financial constraints.At the same time,we further discuss the moderating function of corporate characteristics(property and scale).The result shows that analyst forecast error is positively correlated with financial constraints,and analyst forecast dispersion also is positively correlated with financial constraints.This suggests that analysts’ forecasts can affect the allocation of market resources.However,there is a difference about the effect of analysts’ forecasts on financial constraints in the different enterprises.Furthermore,compared with the state-owned and larger enterprises,the impact of analysts’ forecasts on financial constraints is more obvious in the private and smaller enterprises.On the basis of previous study,this paper enriches the literature about the economic consequences of analysts’ forecasts and also expands the research about affecting factors of financial constraints.In addition,it provides the theoretical basis for market supervision department to further standardize analysts’ behavior,which can effectively promote the healthy development of our capital market.