Impact of investor relations on stock performance surrounding restatement announcements
Abstract
Many firms use investor relations (IR) to communicate with investors and the financial community through meetings, conference calls, and presentations. Engaging in IR provides benefits to firms, including increased liquidity, lower cost of capital, higher stock prices, and higher market value. This study evaluates IR in the context of restatements by exploring the effects of IR activities (during the pre- and post-restatement announcement periods) and investor perceived IR quality (during the pre-restatement announcement period) on cumulative abnormal returns (CAR) in the period surrounding the restatement announcement. Using a sample size of 199 restatements from S&P 500 firms from 2012 through 2018, this study adds to the growing IR literature by exploring the impact of IR on CARs in the wake of restatement announcements. While support for the hypothesized relationships was not evident in this specific sample, this study provides some insights into the relationship between IR and CAR during the period surrounding restatement announcements. This study also discusses avenues for future research to continue investigating these relationships.
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- OSU Dissertations [11222]