Catering To Or Not

The current domestic research mainly focused on the function of analysts tracking to the governance of listed companies,which shows that analysts trace can constraint the behavior of listed company,it indicates that analysts trace can impact on the management of listed companies,In addition,different public companies track different Numbers of analysts,and it is reasonable to suspect that the number of analysts will have an impact on the relationship,because the more people follow the company,the more attention the market tends to pay to the company,and the more pressure management may be under.Therefore,we speculate that the number of analysts following may prompt management to do something against their will.He and Tian(2013)suggested that under the condition of the principal-agent problems,the bigger the reaction of the market to company's share price,the greater the negative impact of the wealth and career of managers,so when analysts tracking number increases,the managers has a strong incentive to meet analysts' expectations to reduce the market reaction,in order to maximize the interests of the individual.Huang et al.(2017)found through research that the ingratiation motivation of the managers obviously exists in the American capital market,and therefore confirmed the "performance pressure theory".According to the theory of"supervision",however,Yu(2008)argues that analysts tracking number will reduce the ability of management of earnings,and reducing the ability of earnings-management means it will cause the company to disclose the real performance levels below analyst expectations.Another controversial theory is the "competitive theory",Hong and Kacperczyk(2010)argues that analysts tracking number increase exacerbate analysts between internal competition,the competition tend to reduce analysts'optimism "prejudice",so as to predict the partial conservative,if this theory was founded,the company revealed performance may be higher than the consensus of analysts' forecasts.This paper synthesizes the three theories of foreign scholars and gives the empirical evidence which is most suitable for domestic theories.Based on the research methods of foreign scholars,this paper divides the dependent variables into three categories,which are lower than analysts' expectations(FAIL),cater to analysts' expectations(MEET)and exceed analysts' expectations(BEAT).This paper uses disordered multiple classification logistic regression to conduct regression analysis on the three theories and explore the applicability of each theory in the A-share market.This paper uses the difference between the annual earnings per share of listed companies and the earnings per share predicted by analysts as the explained variable and the number of analysts tracking as the explanatory variable,to study the relationship between analyst tracking and the explained variable.With the increase of the number of analysts tracking,the conclusion shows that the earnings per share of listed companies are more likely to "meet" analysts' expectations,that is,compared with "supervision theory" or "competition theory","pressure theory"is more suitable for the domestic market,which is basically consistent with the conclusions of foreign studies.In addition,this paper divides the samples into state-owned enterprises and non-state-owned enterprises according to property right nature,so as to verify the application of companies with different property right nature.The conclusion shows that non-state-owned enterprises have a higher probability of catering to analysts' predictions than state-owned enterprises.Next,the paper adopts the first-order difference method to classify the explained variables and then control the possible endogenous problems of the model.The conclusion is consistent with the results of disordered multiple classification logistic regression,indicating that the pressure theory is still more suitable for the A-share market after controlling endogenous problems.Finally,the paper passed the robustness test,the test contains two parts,one is changing the number of analyst tracking to the attention of the research report,and another set the analyst tracking as a dummy variable.The results showed that the pressure theory was still robust.The innovation of this paper lies in(1)the comprehensive analysis of three theories of foreign scholars on analyst tracking and the attitude of the management of listed companies.(2)use domestic data to verify,provide theories in line with the actual situation in China,and provide evidence.(3)the paper demonstrates that the research conclusions of companies with different property rights in China are also different.The research contributions of this paper(1)Enrich the related literatures of domestic research about analysts tracking.(2)Help to study the specific mechanism of impact of analyst tracking on listed companies.(3)It provides the theoretical basis and decision-making basis for the government to promote the stability of the capital market by improving the intermediary of the capital market and increasing the employment of analysts.Meanwhile,it also has certain reference significance for listed companies.