Do Investor Relations Affect Information Asymmetry? Evidence from Australia

Abstract:     
Disclosure via a successful investor relations (IR) policy enables firms to enhance market exposure, increase analyst coverage and attract institutional investors. We examine the link between IR and information asymmetry where a web-based survey was used to rate a firm's practices. Our results show that the level of information asymmetry differs between firms according to their investment in IR and during periods of uncertainty, they experience dissimilar changes in the level of information asymmetry. Disclosure impacts on information asymmetry wherein firms with high quality and continuous disclosure benefit from the lower information asymmetry and experience smaller shocks.

Number of Pages in PDF File: 26

Keywords: investor relations, information asymmetry

JEL Classification: G10, G14

working papers series