Research On The Impact Of Analysts’ Attention On Enterprise Innovation Choice

With the implementation of innovation-driven strategy in China,innovation and technological development have increasingly attracted public attention,and issues related to enterprise innovation have also be the hot spot in domestic and foreign academia.Innovation is not only the main force that can support the development of economy,but also an effective approach to improve the competitive power of enterprises.Enterprise,as an important objects in innovative activities,plays an irreplaceable role.However,because of the long period and the high risk in the innovation activities,the management of the enterprise always takes caution in the investment of innovative projects.The analyst’s attention can monitor the management’s decision making,and solve the asymmetric information and the principal-agency problem,enhance financial support and make sure that capital is fully utilized to improve innovation output and promote the substantial improvement of enterprises’ innovation capability.According to Schumpeter’s innovation theory,principal-agency theory and asymmetric information theory,this article chooses the data from 2006 to 2020 of the Chinese A-share,and this paper empirically examines the influence of the analyst’s attention on the innovation performance though the fixed-effect model.The innovation is divided into substantive innovation and strategic innovation,breakthrough innovation and incremental innovation,and to verify whether analysts’ attention has different incentive effects on different innovation strategies.At the same time,this essay investigates the effects of financial constraints and stock market liquidity on the relationship between analysts’ attention and enterprise innovation.Empirical study proves that: First,analyst’s attention is positively correlated with enterprise innovation output,in other words,the analyst’s attention can increase the amount of innovation by decreasing information asymmetry and strengthening the supervision of management;Second,compared with strategic innovation,the analysts’ attention has a more remarkable incentive effect on the substantive innovation of enterprises.which shows that enterprises attach great importance to improving their core competitive power in the case of analyst tracking;Third,analysts’ attention has a negative impact on the innovation of breakthrough,and has an obvious positive impact on the incremental innovation.The results show that,when the analyst’s attention is raised,the company will be more willing to innovate in the field of knowledge,instead of taking the bigger risk in the field of unknown;Fourth,analyst’s attention can support business innovation by mitigating the degree of financing constraints.The financing constraint mechanism is significantly positive in the analysts’ attention to the total output of enterprise innovation,substantive innovation,strategic innovation and incremental innovation,but analysts’ attention will strengthen the financing constraint and lead to the failure of enterprise breakthrough innovation;Fifth,the stock liquidity mechanism has played a positive regulatory role in the test of analysts’ attention to innovation achievements,substantive innovation,strategic innovation and incremental innovation,but the stock liquidity cannot play a regulatory role in analysts’ attention and breakthrough innovation.The innovative point of this thesis is as follows: On the one hand,this article combines analyst’s attention,the innovation of the firm,financing restriction and the liquidity of stock into the same research framework.With financing constraints and stock liquidity as the new breakthrough,the paper further explores the possible role of analysts’ attention in enterprise innovation,and improves the research on the factors affecting innovation;On the other hand,it incorporates new variable indicators when examining the impact of analysts’ attention on breakthrough and incremental innovation.Identify patents according to the international IPC classification,calculate the number of applications for patents by companies in unknown or known fields divided by the total number of patents applied,and use this as a proxy indicator for breakthrough and incremental innovation to test the impact of analysts’ attention on enterprise innovation choices.