2020年12月22日学术报告通知

发布时间:2020-12-18

内容提要:

We investigate whether pollution aversion has an effect on financial analysts’ earnings forecasting for polluting firms. We find that for firms in polluting industries, geographically proximate financial analysts in China make less favorable (i.e., less optimistic or more pessimistic) earnings forecasts than faraway analysts do, suggestive of pollution aversion as a cause. We find the effect of pollution aversion on forecasts is stronger if the analyst lives in highly polluted areas, suggesting that a polluted environment intensifies one’s pollution aversion. Moreover, we find that less favorable forecasting is more salient for analysts who prefer to follow firms with a high corporate social responsibility (CSR) performance but less so for polluting firms with better CSR initiatives and those headquartered in regions with rigorous environmental regulations, suggesting that financial analysts are pollution conscious. Importantly, we find that analysts’ pollution aversion has the positive effect of strengthening polluting firms’ CSR performance, suggesting that financial analysts perform a social responsibility role.