Abstract:

Based on the Chinese listed companies during 2008-2013, this paper examined the impact of the analyst coverage on the listed companies’ litigation risk. The findings of our study are as follows. First, firms which are covered by the analysts enjoy a reduction in the risk of litigation. Second, compared with the companies in the regions where the law environment is not developed, the effect of analyst coverage on the companies’ litigation risk is more severe in the regions where the environment of law is developed. From this research，we can get a better understanding on the external governance role of the analysts.