Prosocial Analysts and Corporate ESG Activities
Prof. Xuejiao LIU
Professor, Accounting Department,
University of International Business and Economics (UIBE)
Date: 28 August 2025 (Thursday)
Time: 10:00-11:30
Venue: E22-G008
Host: Prof. Morris Ming LIU, Associate Professor in Accounting
Abstract
We investigate how analysts’ prosocial preference influences firms’ ESG activities. Using hand-collected data, we identify prosocial analysts through their volunteering activities. Consistent with the notion that prosocial individuals believe that other-benefiting policies are value-enhancing, we find that prosocial analysts issue overly optimistic earnings forecasts and stock recommendations for firms with high-ESG performance. We continue to show that prosocial analysts’ coverage is positively associated with firms’ future ESG performance, and the association is robust to an alternative measure of ESG performance. Using the setting of brokerage houses’ mergers and closures, we show that the relationship is likely causal. In addition, the positive impact of prosocial analyst coverage on the firm’s future ESG performance is more pronounced when the firm has low current ESG performance and when prosocial analysts are more experienced. Our analyses based on conference call transcripts and negative ESG incidents show that the positive effect of prosocial coverage on firms’ ESG performance is likely through prosocial analysts’ monitoring of firms’ ESG activities. Overall, we show that analysts’ prosocial preferences affect firms’ ESG performance.
Speaker
Xuejiao Liu (PhD, MsA, ACCA) — Professor, Accounting Department, School of Business, University of International Business and Economics (UIBE). Dr. Liu obtained her PhD in accounting from the University of Hong Kong and MsA from the University of Rochester. She graduated with a Bachelor’s degree in accounting from School of Management, Xiamen University. Her work has been published in accounting and finance journals, including Journal of Accounting and Economics, Review of Accounting Studies, Contemporary Accounting Research, Journal of Corporate Finance, Journal of Business Ethics, JBFA, Abacus, and China Industrial Economics (in Chinese). Her research focus on capital market information intermediaries, such as auditors and financial analysts. She has served as the principal investigator on multiple NSFC research projects. She currently holds independent directorships at several publicly listed companies.
All are welcome!
