On the value relevance of analyst opinions and institutional shareholdings in China

Wei Huang, Agyenim Boateng

Research output: Journal PublicationArticlepeer-review

5 Citations (Scopus)


Purpose - This paper aims to examine the relevance of stock analysts' opinions and institutional investors' shareholding to the value of Chinese firms. Design/methodology/approach - The authors use both internal and external corporate governance mechanism to investigate value relevance of analyst opinion and institutional shareholding to Chinese firms. Findings - The authors find that Tobin's Q is positively related to analysts' consensus forecast optimism and institutional investors' shareholding but negatively related to analyst forecast dispersions. Further analysis using subsamples of partially state-owned enterprises and non-state-owned firms indicate that institutional investors have significant impact on firm value for all firms irrespective of the ownership type, whereas analyst forecasts opinions appear to have significant effects on partially state-owned firms but insignificant effects on non-state-owned firms. The results also show that internal governance appears to be an important pre-requisite that affects analysts' forecast opinions and that good internal governance reinforces external governance mechanism to create firm value. Originality/value - Studies analysing the effects of both internal and external mechanisms on firm value in emerging economies are scant. This study attempts to extend and contribute to this line of research by investigating the relevance of institutional investors and stock analysts' opinion to firm valuation.

Original languageEnglish
Pages (from-to)206-225
Number of pages20
JournalInternational Journal of Accounting and Information Management
Issue number3
Publication statusPublished - 1 Aug 2016


  • Analysts
  • China
  • Corporate governance
  • Firm value
  • Institutional investors

ASJC Scopus subject areas

  • Management Information Systems
  • Accounting
  • Economics, Econometrics and Finance (all)


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