The Daily Stat: Analyst Scrutiny Impedes Corporate Innovation

 

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September 11, 2013 Analyst Scrutiny Impedes Corporate Innovation Companies covered by larger numbers of analysts generate fewer patents, and the patents they produce have lower impact than those from other firms, according to an analysis by Jie (Jack) He of the University of Georgia and Xuan Tian of Indiana University. The findings suggest that analysts exert so much pressure on managers to meet short-term financial goals that they impede companies' investment in long-term projects, the researchers say. SOURCE: The dark side of analyst coverage: The case of innovation

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