First, let’s not kid ourselves and say that IR awards are a perfect proxy for superb investor relations. After all, I practiced IR for over 20 years and never got a mention. However, the study by Professor Taffler is the most definitive that I’ve seen in this area. Most other academic research in the area centers around increased disclosure and an implied link to increased stock price. The Taffler study covers all investor relations activities. As to your point about getting nominated because of stellar returns, the study controls for that and addresses that specific point by measuring returns in the year following the nomination for the award. The evidence in the study suggests that superior stock returns in the year prior to the nomination help drive nomination for the awards, but that doesn’t explain the excess returns in the year after the nomination. The study covered a three year period and about 1,000 nominations per year, or over 3,000 in total, so I think it’s fairly broad based.

I’d love to get my academic friends to do more research in the area of investor relations, but so far I haven’t been able to convince them that it is a good field for research.

John