| Summary: | 碩士 === 國立成功大學 === 高階管理碩士在職專班 === 94 === As Taiwan opens up its securities markets and deregulates foreign investment restrictions, its market has extended its scale and integration with international markets, and has attracted more foreign investors into Taiwan’s securities market. In this new environment, public companies need to disclose financial and business information more transparently as a result of the influx of foreign capital. Such is the primary function of the Investor Relations (IR). Investor Relations is a strategic management responsibility that integrates finance, communication, and marketing to enable the most effective two-way communication between a company and the financial community. As the securities market in Taiwan becomes more mature, the management of Investor Relations in public companies has become more important. A well-managed Investor Relations department not only satisfies inquiries and demands from financial institutions and individual investors, but also enhances core competence of the company.
This research discusses the impact of establishing an IR management team in a company on financial analyst’s reports, percentage holding by institutional investors, liquidity of the company’s stock, stock price and volatility of the stock, dividends policy, and financial strategy. We analyze data collected from 33 public companies in Taiwan, which have outstanding IR department, for 3-year period. We find that the IR department has positive impact on analysts’ report, institutional investors’ holding, and cash dividends. It also reduces stock volatility. On the other hand, it does not have significant correlation with price-to-book ratio of the stock.
This paper analyzes and examines the experience and efficacy of establishing IR departments in public companies in Taiwan. For those companies without IR departments, this research provides insight and useful information for the management team when deciding whether to establish IR services in their company. Although this research focuses on Taiwanese companies, it provides information and suggestions for management teams in companies in emerging markets and developing nations, especially for attracting foreign investors and gaining access to global capital markets.
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