We examine the effect of corporate innovation input and output on analysts' estimates of the cost... more We examine the effect of corporate innovation input and output on analysts' estimates of the cost of equity based on data from public listed Chinese companies between 2007 and 2017. Analysts' estimates of the cost of equity significantly increase with corporate innovation input, whereas their estimates decrease with corporate innovation output, as indicated by this research. The results of additional analysis suggest that the role of corporate innovation input in increasing the estimates of the cost of equity is more significant with an increase in environmental uncertainty and negatively mitigated by strong survival ability. However, the role of corporate innovation output in decreasing analysts' estimates of the cost of equity is not significantly moderated by environmental uncertainty or corporate survival ability. Furthermore, we find that analysts consider financial constraints and information asymmetry when estimating the cost of equity. On this basis, the present study confirms that investors are significantly responsive to analysts' estimates of the cost of equity during investment decision making.
We examine the impact of human capital on innovation investment persistence using a sample of hig... more We examine the impact of human capital on innovation investment persistence using a sample of high-tech companies listed in the Chinese A-share market for the period 2009-2017. We find that human capital mitigates the negative effect of financial constraints on innovation investment persistence. We further explore the mechanism through which human capital at the management and employee levels affects innovation investment persistence. We find that management human capital affects innovation investment persistence through the expectation of authorised patents, while employee human capital affects the persistence through salary stickiness. Furthermore, we find that management human capital contributes to an increase in future granted patents through persistent innovation investment.
We examine the effect of corporate innovation input and output on analysts' estimates of the cost... more We examine the effect of corporate innovation input and output on analysts' estimates of the cost of equity based on data from public listed Chinese companies between 2007 and 2017. Analysts' estimates of the cost of equity significantly increase with corporate innovation input, whereas their estimates decrease with corporate innovation output, as indicated by this research. The results of additional analysis suggest that the role of corporate innovation input in increasing the estimates of the cost of equity is more significant with an increase in environmental uncertainty and negatively mitigated by strong survival ability. However, the role of corporate innovation output in decreasing analysts' estimates of the cost of equity is not significantly moderated by environmental uncertainty or corporate survival ability. Furthermore, we find that analysts consider financial constraints and information asymmetry when estimating the cost of equity. On this basis, the present study confirms that investors are significantly responsive to analysts' estimates of the cost of equity during investment decision making.
We examine the impact of human capital on innovation investment persistence using a sample of hig... more We examine the impact of human capital on innovation investment persistence using a sample of high-tech companies listed in the Chinese A-share market for the period 2009-2017. We find that human capital mitigates the negative effect of financial constraints on innovation investment persistence. We further explore the mechanism through which human capital at the management and employee levels affects innovation investment persistence. We find that management human capital affects innovation investment persistence through the expectation of authorised patents, while employee human capital affects the persistence through salary stickiness. Furthermore, we find that management human capital contributes to an increase in future granted patents through persistent innovation investment.
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Papers by Hongxing Peng