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The fragile returns to investor relations: evidence from a period of declining market confidence

Peasnell, K V and Talib, S and Young, S E (2011) The fragile returns to investor relations: evidence from a period of declining market confidence. Accounting and Business Research, 41 (1). pp. 67-90. ISSN 2159-4260

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    Abstract

    This paper assesses the capital market effects of investor relations activities during a period of high-profile corporate scandals. We find no support for the prediction that an established reputation for effective investor relations helped shield US firms from a perceived decline in management credibility and financial reporting integrity associated with Enron and related scandals. On the contrary, tests reveal that firms with an established reputation for superior investor relations activities fared worse on a series of market-related factors. Results suggest that distrust in corporate reporting practices spilled over to investor relations practices, and that best practice investor relations programmes developed during normal market conditions offered little protection from systemic declines in investor confidence arising from the corporate misdeeds of other firms.

    Item Type: Article
    Journal or Publication Title: Accounting and Business Research
    Subjects:
    Departments: Lancaster University Management School > Accounting & Finance
    ID Code: 45474
    Deposited By: ep_importer_pure
    Deposited On: 11 Jul 2011 19:32
    Refereed?: Yes
    Published?: Published
    Last Modified: 09 Apr 2014 22:32
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/45474

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