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How analyst forecast affects liquidity management: Evidence from supplier–customer networks

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  • Chen, Jilong
  • He, Ye
  • Li, Li

Abstract

This paper examines how analyst forecast information about customer firms affects suppliers’ trade credit decisions. Using data of Chinese listed firms from 2008–2023, we find that higher forecast intensity in analyst reports significantly reduces suppliers’ trade credit supply. To address endogeneity concerns, we adopt identification strategies based on analysts’ writing styles and an exogenous regulatory shock. We further explore two underlying mechanisms: suppliers’ reliance on public information and their perceptions of customer risk. The negative impact is stronger when analyst reports are more reliable, supplier–customer relationships are weaker, and suppliers with limited credit redistribution capacity. Overall, our findings suggest that forecast-intensive disclosures increase perceived risk, leading suppliers to adopt more conservative trade credit policies.

Suggested Citation

  • Chen, Jilong & He, Ye & Li, Li, 2026. "How analyst forecast affects liquidity management: Evidence from supplier–customer networks," Pacific-Basin Finance Journal, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:pacfin:v:99:y:2026:i:c:s0927538x2600209x
    DOI: 10.1016/j.pacfin.2026.103263
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