Dissertation
Common investor relations representation
University of Iowa
Doctor of Philosophy (PhD), University of Iowa
Autumn 2023
DOI: 10.25820/etd.006916
Abstract
Many public companies have the same investor relations (IR) representative. I study the consequences of this common representation. In difference-in-differences tests, I find common IR representation increases common institutional ownership, overlap in sell-side analyst coverage, and similarities in guidance policies across clients—even among economically dissimilar firms in different industries. Consequently, firms with common IR representation exhibit heightened return comovement. My results suggest that not only is external IR meaningful, but which external IR representative a firm has plays an important role in their connection to the capital markets.
Details
- Title: Subtitle
- Common investor relations representation
- Creators
- David H. H. Volant
- Contributors
- Paul Hribar (Advisor)Andrew C. Call (Advisor)Daniel W. Collins (Committee Member)Cristi A. Gleason (Committee Member)Jaron H. Wilde (Committee Member)
- Resource Type
- Dissertation
- Degree Awarded
- Doctor of Philosophy (PhD), University of Iowa
- Degree in
- Business Administration (Accounting)
- Date degree season
- Autumn 2023
- Publisher
- University of Iowa
- DOI
- 10.25820/etd.006916
- Number of pages
- ix, 53 pages
- Copyright
- Copyright 2023 David H. H. Volant
- Language
- English
- Date submitted
- 11/28/2023
- Description illustrations
- illustrations, tables, graphs
- Description bibliographic
- Includes bibliographical references (pages 31-34).
- Public Abstract (ETD)
- I study the capital market consequences of public companies having the same IR representative, or common IR representation. My results suggest common IR representation leads to greater common institutional investor ownership, sell-side analyst coverage, similar forward looking guidance policies, even for firms that are economically dissimilar in different industries. Consequently, I also link common IR representation to stock return comovement. My results shed light on the degree of common IR connections in the capital markets and on the scope of the external IR industry; I find that more than one in seven public companies have relied on external IR representation at some point since 2005, and that the frequency of common IR representation has been increasing since 2011. My study is likely to be of interest to companies deciding whether to outsource IR. Specifically, my results suggest that firms considering whether to outsource IR should also evaluate the investor and analyst following of an IR company’s clients. My study should also be of interest to academics seeking to understand capital market connections and information flows, as my evidence is consistent with firms in different industries being connected through their common IR representative.
- Academic Unit
- Tippie College of Business
- Record Identifier
- 9984546542102771
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