Investor Relations and the Analysts' Forecasts: Empirical Evidence from China

The paper examines the relationship between investor relations management, the number of analysts following each firm and properties of the analysts' earnings forecasts by using data from the China Investor Relations Index of Nanjing University (CIRI(NJU)2005-2006). We find that firms with high level of investor relations could significantly attract the concerns of analysts, while the coefficient on disclosure quality is insignificant. By controlling of the endogenous, the result remains almost the same with the a little lower significance of other variables except disclosure quality. We also find that the investor relations as limited positive impact on analyst performance, such as forecast accuracy and consistency. Insignificant negative relations between communication quality and analyst accuracy, disclosure and individual analyst accuracy and significant positive relations between disclosure and analyst consensus are opposite with reported study result, which need further discussion.