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Bright side or dark side? The impact of analyst coverage on corporate sustainable development

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Listed:
  • Yu, Boqi
  • Li, Wendi
  • Li, Qi
  • Wang, Liangcheng

Abstract

Financial analysts are sophisticated market participants in corporate governance, but they also impose pressure on managers to adopt trade-off strategies when allocating resources across the triple bottom line. Using a sample of Chinese listed firms, this study investigates the impact of analyst coverage on corporate sustainable development. Our empirical results indicate that analyst coverage overall enhances corporate sustainable development, showing a bright side. The potential mechanisms suggest that analyst coverage enhances corporate information disclosure, improves corporate governance quality, and alleviates financing constraints. However, our cross-sectional tests reveal that analyst coverage has a potential dark side, as it enhances the economic performance of small and medium-sized enterprises (SMEs) while weakening their social and environmental performance, and it enhances the social performance of labor-intensive enterprises (LIEs) and the environmental performance of high-carbon emission enterprises (HCEs) while weakening their economic performance. Our findings provide new evidence for a dialectical understanding of the two-sided role of analysts in corporate sustainable development.

Suggested Citation

  • Yu, Boqi & Li, Wendi & Li, Qi & Wang, Liangcheng, 2026. "Bright side or dark side? The impact of analyst coverage on corporate sustainable development," Research in International Business and Finance, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:riibaf:v:84:y:2026:i:c:s0275531926000334
    DOI: 10.1016/j.ribaf.2026.103306
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