Research On Investor Relations Management Under Crisis And Value Effect

On the one hand,investor relations management has gradually attracted overwhelming attention of regulators and listed companies since it was introduced into China by overseas listed companies in 2002.However,compared with the thirty-year practice of foreign capital market,the investor relations management in China is relatively immature,and remains in its relatively low level,leaving many parts to be improved.On the other hand,with the development of capital market,the behavior of enterprises is becoming more and more complex.In recent years,crisis of listed companies has become frequent,damaging investors' confidence and seriously affecting investor relations(IR).When company is facing an IR crisis,sensitive investors will sell the company's stock,leading to a sharp fall in the share price as well as the market value,and China Industrial Bank Co.,Ltd.has experienced twice of such IR crisis.Therefore,how to conduct IRM activities under crisis situation,restore investor trust,promote the operation of business activities,and protect company value has become urgent problem for listed companies.Under this background,this paper focuses on investor relationship management and its value effect,taking China Industrial Bank Co.,Ltd.as example.This paper is to discuss: under crisis situation,how could listed companies achieve the maximization of corporate value through investor relationship management activity,its value effect and role path.First,through literature review and interpretation of investor relations management,this paper defines investor relations crisis and investor relations management under crisis scenario: investor relations crisis is a negative impact on the relationship between companies and investors,and requires companies to make key decisions and respond to emergencies.Investor relations management under crisis,is a strategic management activity seeking for the public's understanding and support through strengthening the disclosure of information with the public,its purpose is to eliminate or reduce the threat of loss that IR crisis brings to the enterprise and to achieve the maximization of corporate value.Second,the value effect mechanism of IRM under the crisis situation is constructed through the theoretical part.The protection of the market value of listed companies: before crisis,the high level IRM,will form the corporate reputation,thus when a crisis occurs,analysts and investors are more inclined to believe in that listed company,rather than "vote by foot".After IR crisis happens,a listed company urgently acts to mediate the crisis through the IRM action.It can make investors regain confidence and protect market value by communicating directly with investors and communicating strategic information continuously and transparently.The protection of company performance: IRM indirectly protect company performance by promoting the strategic planning or financing plan hindered by IR crisis: On the one hand,the enterprise introduces strategic investors,improving corporate governance structure,so as to realize the balance of ownership.At the same time,the right of speech of strategic investors helps them to better supervise corporate performance,further suppressing the principal-agent problem and improving the operating efficiency of the company through the improvement of the governance structure.On the other hand,through the promotion of financing plan hindered by IR crisis,enterprise gets supplementary capital adequacy rate,reducing the operation risk of commercial bank,protecting the capital expansion and the company's business scale expansion.These aspects guarantee the improvement of business activities of commercial banks,and then realize the protection of the company's performance.Third,take punishment bulletins as example,collect data of IRM activities of listed companies under IR crisis situations,finding that different IRM action will produce different value effects;open communication action has better market value effect than private communication.Fourth,according to the case study of China Industrial Bank Co.,Ltd.,this paper analyzes that firms should use the two-way interactive communication and public relations management strategy to resolve the crisis;analyzes and verifies the value effect mechanism,then confirmed that IRM could protect the market value and corporate performance under the crisis situation.Finally,summarizes the full text,giving conclusion and suggestion.The significance of this research lies as follows.Present studies about IRM and its value effect are mostly normative,empirical research,lacking case study;most discussions focused on how to realize the IRM's value creation effect under positive situation,there are few people concerned about the IRM's value protection effect and mechanism of IRM under crisis situations.In this paper,deductive reasoning is used to form the mechanism of value effect of IRM under crisis scenarios.By standardized research,this paper discusses the value effects of different IRM methods,enriching and expanding the research scenarios,methods and objects of IRM.From the practical point of view,this paper will help to guide enterprises in crisis situation to carry out targeted IRM activities,so as to promote the company's business plan and development strategy smoothly,thus realizing the protection of the value of the company.It also helps the government and regulators to formulate IRM work guidelines according to the practice of high-quality IRM,guiding enterprises to conduct right IRM activities,so as to improve the efficiency of capital market.