The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
Yan Sun - One of the best experts on this subject based on the ideXlab platform.
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do pennies matter Investor Relations consequences of small negative earnings surprises
Review of Accounting Studies, 2010Co-Authors: Richard M Frankel, William J Mayew, Yan SunAbstract:Anecdotal and survey evidence suggest that managers take actions to avoid small negative earnings surprises because they fear disproportionate, negative stock-price effects. However, empirical research has failed to document an asymmetric pricing effect. We investigate Investor Relations costs as an alternative incentive for managers to avoid small negative earnings surprises. Guided by CFO survey evidence from Graham et al. (J Account Econ 40:3–73, 2005), we operationalize Investor Relations costs using conference call characteristics—call length, call tone, and earnings forecasting propensity around the conference call. We find an asymmetric increase (decrease) in call length (forecasting propensity) for firms that miss analyst expectations by 1 cent compared with changes in adjacent 1-cent intervals. We find no statistically significant evidence that call tone is asymmetrically more negative for firms that miss expectations by a penny. While these results provide some statistical evidence to confirm managerial claims documented in Graham et al. (J Account Econ 40:3–73, 2005) regarding the asymmetrically negative effects of missing expectations, our tests do not suggest severe economic effects.
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do pennies matter Investor Relations consequences of small negative earnings surprises
Social Science Research Network, 2007Co-Authors: Richard M Frankel, William J Mayew, Yan SunAbstract:We study earnings - conference-call characteristics to understand the Investor - Relations consequences of small negative earnings surprises. Our study is motivated by the lack of empirical evidence supporting the notion that capital markets excessively punish firms that miss earnings targets by small amounts (Skinner and Sloan 2002, Kinney et al. 2002) despite managerial claims that such punishment exists (Graham et al. 2005). We view conference calls as a particularly powerful setting to investigate claims of asymmetric Investor-Relations effects for missing analyst expectations. We find a significant increase in call length for firms that miss analyst expectations by one cent compared to the increase in adjacent one-cent intervals. This increase is more pronounced for firms with higher analyst following. We also find that firms just missing expectations are about 5% less likely to offer future earnings guidance around the conference call. However, we find no statistically significant evidence that the tone of the call is asymmetrically more negative for firms that just miss expectations. We confirm these findings by examining whether the discussion between managers and individual analysts is related to whether the expectation of that particular analyst is met. In sum, while we find some statistical evidence to confirm the survey results of Graham et al. (2005) regarding the asymmetrically negative effects of missing expectations, our tests do not suggest that severe economic effects result from just missing expectations.
Saskia D Buijl - One of the best experts on this subject based on the ideXlab platform.
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best practices in managing Investor Relations websites directions for future research
Journal of Information Systems, 2008Co-Authors: L H H Bollen, H F D Hassink, Rindert K De Lange, Saskia D BuijlAbstract:ABSTRACT: This study aims to suggest areas for future research on the quality of Internet Investor Relations based on a structured analysis of Investor Relations activities within companies with a high‐quality Investor Relations website. The study is based on six case studies and examines the organizational structure and processes behind four high‐quality Investor Relations websites and two low‐quality sites. The study shows that there are particular managerial practices within companies with high‐quality Investor Relations websites, for six of the seven elements studied. These results indicate that future research on the quality of Internet Investor Relations should address variables that reflect differences in managerial capabilities and organizational structures with respect to Investor Relations activities. The relevance of such variables also has theoretical and methodological consequences for future studies. With respect to research on the development and maintenance of Investor Relations websites w...
Gregory S Miller - One of the best experts on this subject based on the ideXlab platform.
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Investor Relations engagement and shareholder activism
Social Science Research Network, 2021Co-Authors: Kimball Chapman, Gregory S Miller, Jed J Neilson, Hal D WhiteAbstract:A dedicated Investor Relations (IR) function facilitates direct and ongoing dialogue between management and shareholders. This paper examines whether this form of engagement mitigates activism that relies upon support from other shareholders. We find that IR engagement is associated with increased Investor confidence in management and the board, as well as a lower likelihood of activism, with this deterrent effect becoming stronger when there are fewer frictions surrounding the development of mutual understanding and trust with Investors. We also find that when firms do experience an activist campaign, firms with IR engagement have less costly and contentious campaigns, including a lower likelihood of CEO turnover, than those without such a commitment. Taken together, our findings suggest that direct and ongoing IR engagement is an important factor in achieving mutual understanding and trust between the firm and its shareholders, which deters activist Investors and mitigates the costly escalation of initiated campaigns.
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Investor Relations and information assimilation
The Accounting Review, 2019Co-Authors: Kimball Chapman, Gregory S Miller, Hal D WhiteAbstract:ABSTRACT 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 lowe...
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Investor Relations and information assimilation
Social Science Research Network, 2018Co-Authors: Kimball Chapman, Gregory S Miller, Hal D WhiteAbstract:Research has shown the importance of corporate disclosure and dissemination in reducing information asymmetry and improving market efficiency. However, while Investors and analysts might receive corporate disclosures, they often need help with assimilating the information to better understand its implications for firm value. 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.
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Investor Relations firm visibility and Investor following
The Accounting Review, 2012Co-Authors: Brian J Bushee, Gregory S MillerAbstract:ABSTRACT: We examine the actions and outcomes of Investor Relations (IR) programs in smaller, less-visible firms. Through interviews with IR professionals, we learn that IR strategies have a common goal of attracting institutional Investors and that direct access to management, rather than increased disclosure, is viewed as the key driver of the strategy's success. We test for the effects of IR programs by examining small-cap companies that hired IR firms in a differences-in-differences research design with controls for changes in disclosure and determinants of the decision to initiate IR. Relative to a matched sample of control firms, we find that companies initiating IR programs exhibit greater increases in institutional Investor ownership and a shift toward Investors that normally would not follow the companies. We also find greater improvements in analyst following, media coverage, and the book-to-price ratio. Our results indicate that IR activities successfully improve visibility, Investor following,...
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Investor Relations firm visibility and Investor following
Social Science Research Network, 2007Co-Authors: Brian J Bushee, Gregory S MillerAbstract:Many small firms face significant challenges in improving visibility and attracting Investors to their stock. One response to these challenges is to initiate an Investor Relations (IR) program. Through interviews and surveys with IR professionals, we learn that the IR process focuses on management access and company visibility as key drivers of the strategy's success, with attracting institutional Investors as a common goal. Our empirical tests examine a sample of 210 small- and mid-cap companies that increased IR activities (proxied by the hiring of an outside IR firm). Our results show that the companies exhibit increases in disclosure, media coverage, and analyst following. They also exhibit substantial and ongoing increases in institutional Investor ownership. As part of this increase, our sample firms experience a shift in Investor composition toward institutions that are more geographically distant and that tend to invest in larger companies, consistent with the IR activities creating visibility to a different type of Investor. Finally, there are improvements in valuation in the year following the IR initiation, as proxied by the book-to-price ratio and stock returns. Overall, our results indicate that IR activities focused on increasing firm visibility are successful in impacting market participants' interactions with the companies.
Richard M Frankel - One of the best experts on this subject based on the ideXlab platform.
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do pennies matter Investor Relations consequences of small negative earnings surprises
Review of Accounting Studies, 2010Co-Authors: Richard M Frankel, William J Mayew, Yan SunAbstract:Anecdotal and survey evidence suggest that managers take actions to avoid small negative earnings surprises because they fear disproportionate, negative stock-price effects. However, empirical research has failed to document an asymmetric pricing effect. We investigate Investor Relations costs as an alternative incentive for managers to avoid small negative earnings surprises. Guided by CFO survey evidence from Graham et al. (J Account Econ 40:3–73, 2005), we operationalize Investor Relations costs using conference call characteristics—call length, call tone, and earnings forecasting propensity around the conference call. We find an asymmetric increase (decrease) in call length (forecasting propensity) for firms that miss analyst expectations by 1 cent compared with changes in adjacent 1-cent intervals. We find no statistically significant evidence that call tone is asymmetrically more negative for firms that miss expectations by a penny. While these results provide some statistical evidence to confirm managerial claims documented in Graham et al. (J Account Econ 40:3–73, 2005) regarding the asymmetrically negative effects of missing expectations, our tests do not suggest severe economic effects.
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do pennies matter Investor Relations consequences of small negative earnings surprises
Social Science Research Network, 2007Co-Authors: Richard M Frankel, William J Mayew, Yan SunAbstract:We study earnings - conference-call characteristics to understand the Investor - Relations consequences of small negative earnings surprises. Our study is motivated by the lack of empirical evidence supporting the notion that capital markets excessively punish firms that miss earnings targets by small amounts (Skinner and Sloan 2002, Kinney et al. 2002) despite managerial claims that such punishment exists (Graham et al. 2005). We view conference calls as a particularly powerful setting to investigate claims of asymmetric Investor-Relations effects for missing analyst expectations. We find a significant increase in call length for firms that miss analyst expectations by one cent compared to the increase in adjacent one-cent intervals. This increase is more pronounced for firms with higher analyst following. We also find that firms just missing expectations are about 5% less likely to offer future earnings guidance around the conference call. However, we find no statistically significant evidence that the tone of the call is asymmetrically more negative for firms that just miss expectations. We confirm these findings by examining whether the discussion between managers and individual analysts is related to whether the expectation of that particular analyst is met. In sum, while we find some statistical evidence to confirm the survey results of Graham et al. (2005) regarding the asymmetrically negative effects of missing expectations, our tests do not suggest that severe economic effects result from just missing expectations.
Nathan Y Sharp - One of the best experts on this subject based on the ideXlab platform.
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Managing the Narrative: Investor Relations Officers and Corporate Disclosure
Journal of Accounting and Economics, 2019Co-Authors: Lawrence D Brown, Michael B. Clement, Andrew C. Call, Nathan Y SharpAbstract:Investor Relations officers (IROs) play a central role in corporate communications with Wall Street. We survey 610 IROs at U.S. public companies and conduct 14 follow-up interviews to deepen our understanding of the role of IROs in corporate disclosure events. Three important themes emerge from our results: (i) the value, nature, and timing of private communication between IROs, analysts, and Investors; (ii) the significant influence IROs have on corporate disclosures; and (iii) the degree of “theater” involved in public earnings conference calls, even the Q&A portion. We provide insights into the Investor Relations, analyst, institutional Investor, and disclosure literatures.
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managing the narrative Investor Relations officers and corporate disclosure
Social Science Research Network, 2017Co-Authors: Lawrence D Brown, Michael B. Clement, Andrew C. Call, Nathan Y SharpAbstract:Investor Relations officers (IROs) play a central role in corporate communications with Wall Street. We survey 610 IROs at publicly traded U.S. companies and conduct 14 follow-up interviews to gain insights into the nature of their interactions with sell-side analysts and institutional Investors, and to deepen our understanding of the role of IROs in corporate disclosure events. Three important themes emerge from our results: (i) the value, nature, and timing of private communication between IROs, analysts, and Investors; (ii) the significant influence IROs have on corporate disclosures; and (iii) the degree of “theater” involved in public earnings conference calls. We explore numerous topics that IROs are uniquely suited to address, and we provide new insights into the Investor Relations, analyst, institutional Investor, and disclosure literatures.
