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dc.contributor.authorCao, June
dc.contributor.authorLi, W.
dc.contributor.authorBilokha, A.
dc.date.accessioned2022-07-21T01:30:36Z
dc.date.available2022-07-21T01:30:36Z
dc.date.issued2022
dc.identifier.citationCao, J. and Li, W. and Bilokha, A. 2022. Low-Carbon City Initiatives and Analyst Behaviour: A Quasi-Natural Experiment. Journal of Financial Stability. 62: 101042.
dc.identifier.urihttp://hdl.handle.net/20.500.11937/88981
dc.identifier.doi10.1016/j.jfs.2022.101042
dc.description.abstract

This paper investigates how environmental regulation and action affect analyst behaviour. Exploiting staggered enactment of low carbon city (LCC) initiatives in a difference-in-differences (DiD) setting, we observe that analyst forecast accuracy (dispersion) is significantly lower (greater) for client firms headquartered in cities covered by the LCC pilot programme, especially among firms with a low-quality information environment. The LCC effort affects analyst behaviour via increased firm risk and reduced earnings predictability, causing enhanced site visits and coverage. The results are stronger in cities with more rigorous enforcement and regulation intensity, for private firms with high business complexity and in heavily polluting industries. Results are robust to DiD models with entropy balancing matching, placebo tests, parallel trend tests, and a battery of fixed effects. Collectively, they reveal that environmental regulation has real impacts on analyst forecast behaviour.

dc.titleLow-Carbon City Initiatives and Analyst Behaviour: A Quasi-Natural Experiment
dc.typeJournal Article
dcterms.source.titleJournal of Financial Stability
dc.date.updated2022-07-21T01:30:36Z
curtin.departmentSchool of Accounting, Economics and Finance
curtin.accessStatusFulltext not available
curtin.facultyFaculty of Business and Law
curtin.contributor.orcidCao, June [0000-0003-2981-4174]
curtin.contributor.scopusauthoridCao, June [57210977278]


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