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The value of (private) investor relations during the COVID-19 crisis

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  • Neukirchen, Daniel
  • Engelhardt, Nils
  • Krause, Miguel
  • Posch, Peter N.

Abstract

We investigate the value of investor relations (IR) and find firms with strong IR to experience between five and eight percentage points higher stock returns than those with weak IR during the COVID-19 crisis. Firms with better-quality IR are also associated with higher investor loyalty and appear to have attracted significantly more institutional investors over the crisis period. This suggests that a firm’s IR contributes to value generation by enhancing credibility with shareholders and by diversifying its shareholder base. After decomposing IR into public and private transmission channels, we find the private IR function to be the main driver of our results.

Suggested Citation

  • Neukirchen, Daniel & Engelhardt, Nils & Krause, Miguel & Posch, Peter N., 2023. "The value of (private) investor relations during the COVID-19 crisis," Journal of Banking & Finance, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:jbfina:v:147:y:2023:i:c:s0378426622000504
    DOI: 10.1016/j.jbankfin.2022.106450
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    2. Liu, Qingfu & Shi, Chen & Tse, Yiuman & Wang, Chuanjie, 2023. "The value of communication during pandemics," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Investor relations; Financial markets; COVID-19; Institutional investors;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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