Corporate site visits and firm performance

Abstract

Corporate site visits (CSVs) are an important and popular channel for investors to interact with corporate insiders. Using Chinese stock market data, this study investigates the relationship between corporate site visits and firm performance. We find that a firm's performance, measured by ROE and Tobin's Q, is positively associated with the number of CSVs it hosts, the depth and breadth of communication during the CSVs, and the number of visitors, especially institutional investors. Regarding the influence of specific visitor type, the number of mutual fund and the research teams of securities companies are positively associated with a firm's performance. The results are robust after using the number of flights from and to the hosting city as instrumental variable to mitigate potential endogeneity. This study provides important implications for practitioners who organize CSVs and policymakers who regulate CSVs.