Investor relations and the cost of equity capital--From the perspective of information asymmetry
This paper investigates the association between investor relations level and the cost equity. Our measure of investor relations level is Nankai IRMI(investor relations management index), which based on amount of key non-financial statistics, forward-looking information, communication panel and mechanism provided in the 2005 annual reports and web sites of a sample of 103 firms. The results showed that higher investor relations are associated with lower cost of capital after controlling for market beta and firm size, and investor relations. We also found that there was a net information risk change between high and low IRMI, which could be viewed as investor relations value by reduce information asymmetry. Then we fatherly explored the association among investor relations, information asymmetry and the cost of equity capital. We found investor relations do reduce information asymmetry, and then influence cost of equity capital. The conclusion of the study contributed to the better understanding the relations between investor relations and cost of equity capital in Chinas listed companies.
investor relations management Asymmetric information cost of Equity capital
Ma Lian-fu HU Yan
Corporate governance research centre,Business School Nankai University,China,300071
国际会议
International Symposium on Financial Engineering and Risk Management(2008年金融工程与风险管理)
上海
英文
77-81
2008-06-01（万方平台首次上网日期，不代表论文的发表时间）