We have benefited from useful comments and suggestions from Nikos Vafeas, an anonymous referee and workshop participants at Maastricht University. We acknowledge research assistance from Constantina Pavlou, and financial support from the University of Cyprus Research Committee.
Valuation effects of investor relations investments
Article first published online: 13 JUN 2011
© 2011 The Authors. Accounting and Finance © 2011 AFAANZ
Accounting & Finance
Volume 52, Issue 3, pages 941–970, September 2012
How to Cite
Vlittis, A. and Charitou, M. (2012), Valuation effects of investor relations investments. Accounting & Finance, 52: 941–970. doi: 10.1111/j.1467-629X.2011.00426.x
- Issue published online: 7 SEP 2012
- Article first published online: 13 JUN 2011
- Received 15 November 2010; accepted 26 April 2011 by Robert Faff (Editor).
- Event study;
- Investor relations;
We investigate the stock price performance of 146 firms announcing the appointment of a new investor relations (IR) officer or the hiring of an IR firm between 1999 and 2005. We find positive abnormal returns around the announcement day. In addition, we find evidence that firms with lower valuations, higher idiosyncratic risk, greater chief executive officer holdings, and firms that announce in the post-Sarbanes-Oxley Act era experience greater valuation effects. Finally, we document significant reductions in the information asymmetry and significant increases in the liquidity and visibility of IR firms in the year following the IR announcement.