Investor Relations and Information Assimilation

By Kimball L. Chapman, Gregory S. Miller, Halbert White. Accounting Review, 2018

186 citations recorded by the source corpus.

This paper examines whether investor relations (IR) officers provide value by facilitating the assimilation of firm information by the market. We find that firms with IR officers have lower stock price volatility, lower analyst forecast dispersion, higher analyst forecast accuracy, and quicker price discovery, consistent with IR officers aiding market participants in their assimilation of firm information. We also show that our findings are stronger for firms with longer-tenured IR officers. Finally, we find that when firms transition from a long-tenured IR officer to a new IR officer, stock price volatility increases, analyst forecasts become more disperse and less accurate, and the price discovery process slows, despite no significant change in the firm's disclosures, media coverage, or performance around the turnover. Collectively, these findings suggest that in-house IR officers, particularly those with greater experience, help facilitate information assimilation by the market, which has positive market effects. JEL Classifications: G14; M40; M41.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/1f9caa46dcfad14a353f7e6d9f32506a9f1dfb26

Citations in the corpus