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2021
- handle: 10670/1.0i4tu3
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Earnings Wage rates Wage-fund Departmental salaries Remuneration Pay Salaries Compensation Working class--Wages Wellness Personal health Biography--HealthCiter ce document
Alexandre Garel et al., « Does Analyst Coverage Impede Long-Term Investments? Evidence from Health and Safety Programs », Comptabilité Contrôle Audit, ID : 10670/1.0i4tu3
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This paper studies the linkage between analyst coverage and Health and Safety (H&S) programs, which have started to emerge in U.S. firms to improve employee health and control healthcare expenditures. Given their homogeneity across firms, their well-documented profitability and long-term payoffs, H&S programs provide an interesting setting to revisit the effect of analyst coverage on long-term investments. We find a strong and negative association between analyst coverage and H&S programs. An instrumental variable approach suggests that the effect of analyst coverage is causal. Cross-sectional analysis indicates that the effect of analyst coverage is more pronounced for firms with a high cost of H&S programs relative to earnings, low blockholder ownership or low long-term investor ownership, and with a low distance of realized earnings to analysts’ earnings forecasts. Overall, these results lend empirical support to the view that analyst coverage deters long-term investments in H&S programs by exerting pressure on managers to meet short-term earnings forecasts.JEL Classification: G24, G32, G34, M14