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:
Journal Article
Journal or Publication Title:
Accounting and Business Research
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/aacsb/disciplinebasedresearch
Subjects:
ID Code:
45474
Deposited By:
Deposited On:
11 Jul 2011 18:32
Refereed?:
Yes
Published?:
Published
Last Modified:
02 Dec 2020 01:11