Can Investor Relations Management Reduce Enterprise Violation Risk? Evidence from the Comprehensive Survey of Investor Relations Management in Chinese A-share Listed Companies

Abstract

Based on special data achieved from comprehensive survey of investor relations management status of A-share listed companies implemented by Nanjing University and China Securities Regulatory Commission, this paper examines the correlation between investor relations management & enterprise violation risk and its influencing factors. It comes to the conclusions that there is a significantly negative relation between investor relations management and future enterprise propensity for violation, and it is still robust after the control of endeogeneity. It shows that effective management of investor relations can significantly inhibit enterprise violation risk. Further analysis of influencing factors indicates that in terms of the inhibition of enterprise violation risk, investor relations management and internal control quality are complementary, and visible factors such as media reports, analyst tracking, corporate size and institutional holdings do not have significant effects on the negative relationship between investor relations management and enterprise violation risk. This paper not only theoretically extends the research paradigm of investor relations management, but also has the important enlightenment to the regulation of the operation of listed companies, the encouragement to investor confidence and the prevention of extreme volatility in financial markets.