Empirical Research On Investor Relations Management And The Effect On Firm Value

Investor Relations is the strategy management responsibility of a company. It takes financial, communication and marketing methods to show the company's business condition and development prospects in detail to existing investors and potential investors. Making effective use of Investor Relations may have a positive impact on the market value and a negative impact on financing costs.With the advance of the equity division reformation of listed companies, the formation of a buyer's capital market and the market value of listed companies as a new assessment approach. Investor Relations Management is of vital significance to enhance value, improve corporate governance, and protect investors and financing channels. So the regulatory authorities introduced a number of measures to promote the Investor Relations Management of listed companies. In recent years, listed companies are actively trying to carry out investor relations management activities. The development of Internet technology provides the company an advanced communicating channel with investors. Companies establish "Investor Relations" column on the websites to make full use of the advantages of web and establish a rapid, convenient, efficient and low-cost communication management. The unique advantage of the Internet has made it become an ideal platform for exchanging information between the listed company and external investors.It is wanted to know whether Investor Relations Management level will affect the value of enterprise, and from the view of theory and literature this impact may be positive. This paper designs a website Investor Relations Management index including two dimensions of disclosure quality and communication quality. The empirical results show that the listed companies in China to raise the value of investor relations management can be helpful to the value. A company with a higher Investor Relations Management level will has a stronger profitability. Investors are willing to pay premium for companies with high Investor Relations Management level. For company with a higher Investor Relations Management level, the effect on the value of the company is more obvious. It notes that the value effect has relations with the Investor Relations Management level. However, the Investor Relations Management level for the company value might be a lag effect and statistical indicators show that Chinese listed companies are still at low level of investor relations management. Therefore, effective mechanism of investor relations management to the company value still has to be a deep study.Therefore, promoting the investor relations management of listed companies has great significance for enhancing the value of listed companies, creating investor confidence, and improving China capital market. Whether from a macro or micro level, it must takes measures to work together to improve the overall situation of Investor Relations Management.