Do Investor Relations Affect Information Asymmetry? Evidence from Australia

26 Pages Posted: 28 Nov 2006

See all articles by Millicent Chang

Millicent Chang

The University of Western Australia; University of Wollongong

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Iain Watson

The University of Western Australia - Department of Accounting and Finance

Gino D'Anna

The University of Western Australia

Date Written: November 2006

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.

Keywords: investor relations, information asymmetry

JEL Classification: G10, G14

Suggested Citation

Chang, Millicent and Wee, Marvin and Watson, Iain and D'Anna, Gino, Do Investor Relations Affect Information Asymmetry? Evidence from Australia (November 2006). Available at SSRN: https://ssrn.com/abstract=947191 or http://dx.doi.org/10.2139/ssrn.947191

Millicent Chang (Contact Author)

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

University of Wollongong ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

Marvin Wee

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Iain Watson

The University of Western Australia - Department of Accounting and Finance ( email )

School of Business
35 Stirling Highway
Crawley, Western Australia 6009
Australia

Gino D'Anna

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia

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