Analyst Network: Implications for Systemic Risk of Non-Financial Firms in China

By constructing an information network through firm–analyst relationships, this article explores the impact of a firm's position in the analyst network on the systemic risk of non-financial companies by utilizing a large sample of Chinese-listed companies from 2003 to 2022. Empirical findings document that central firms in the analyst network face lower systemic risk. Such a result remains valid under endogeneity analyses and a wide range of robustness checks. Furthermore, channel analysis reveals that network centrality impacts systemic risk of non-financial firms through information effect and corporate governance mechanism. To be specific, the role of the information network in mitigating systemic risk can be attributed to its ability to enhance the information transparency and governance level of firms with high network centrality. Our article contributes to the literature on information transmission in analyst networks and provides a new perspective for understanding the relationships among analyst behavior and systemic risk of non-financial firms.