The diligent effect of investor relation officers in conference calls: Evidence from China

Abstract

This study explores the determinants of investor relations (IR) officers’ diligence in conference calls and the impact of their diligence on capital markets. We apply IR officers' attendance in conference calls as a proxy variable for their diligence. We find that the age, gender, salary, and tenure of IR officers and the start time of conference calls are determinants of IR officers' diligence in conference calls. Their diligence significantly increases institutional ownership and reduces returns volatility. Further analysis shows that IR officers' diligence facilitates the growth of domestic institutional investors' ownership significantly more than that of foreign institutional investors. In addition, information transparency significantly facilitates the relationship between IR officers' diligence and return volatility. Finally, the change in institutional ownership and return volatility also varies with firm size and state ownership. In conclusion, we find that IR officers' diligence plays a positive role in IR management, as it significantly improves firms' institutional ownership and lowers return volatility.