The Theory and Practice of Investor Relations: A Global Perspective

G. Andrew Karolyi (), Dawoon Kim () and Rose Liao ()
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G. Andrew Karolyi: SC Johnson College of Business, Cornell University, Ithaca, New York 14853;
Dawoon Kim: Nanyang Business School, Nanyang Technological University, 639798 Singapore, Singapore;
Rose Liao: Rutgers Business School, Rutgers University, Newark, New Jersey 07102

Management Science, 2020, vol. 66, issue 10, 4746-4771

Abstract: Using proprietary survey data of investor relations (IR) officers from 59 countries, we uncover new stylized facts on a wide variety of IR functions, such as the firm’s interactions with brokers and investors, the formulation of its disclosure policies, and its global outreach efforts. We find that IR activities vary widely across firms, industries, and countries. They have become increasingly important, as reflected by the more frequent involvement of IR officers with senior executives on a day-to-day basis. We also find that large and complex firms receiving greater media attention engage more in IR activities. In addition, firms domiciled in countries with weaker legal protections for investors and poorer disclosure standards, those cross-listed in the stock markets that are outperforming, and those with high global media visibility invest in greater global outreach efforts with IR activities. Firms’ IR efforts to investors worldwide are associated with higher Tobin’s q valuation ratios. We interpret our findings in the context of theories and existing evidence on the role of asymmetric information and governance problems in global markets.

Keywords: investor relations; disclosure; institutional investors; market valuation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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