Information in excess analyst coverage: Evidence from China’s stock market
Information in excess analyst coverage: Evidence from China’s stock market
This paper investigates whether excess analyst coverage can transmit information about future stock return and firm performance. We find that excess analyst coverage is positively correlated with future stock return, return on total assets and unexpected earnings of firms. Meanwhile, the abnormal return of the arbitrage strategy based on excess analyst coverage comes from its predictive power on future firm performance. Moreover, if excess analyst coverage is caused by good news, then higher exc