Kimball L. Chapman (Washington University in St. Louis), Gregory S. Miller (University of Michigan) and Hal D. White (University of Notre Dame) ask whether investor relations (IR) teams provide value by facilitating the assimilation of firm information by market participants. Using a sample of U.S. firms, the scholars find that companies with IR officers have a lower stock price volatility, a lower analyst forecast dispersion, a higher analyst forecast accuracy, as well as a swifter price discovery. The longer the IR officers are with the firm, the stronger are the above-described results. Overall, their findings suggest that in-house IR teams, especially the more experienced IR officers, help to facilitate information assimilation, which holds positive market effects.
Read full paper “Investor Relations and Information Assimilation” by Kimball L. Chapman, Gregory S. Miller and Hal D. White, The Accounting Review (March 2019, Vol. 94, No. 2, pp. 105-131) at aaapubs.