Investor relations for private investors

Tobias Harzer

2005

Investor Relations (IR) are becoming increasingly important as companies are looking more and more for equity in the capital market. However, the impact of IR on the target group of private investors, who are becoming increasingly important as a source of new capital, is hardly known. IR geared towards this target group as well as the corresponding review of success is currently not yet possible.

In his thesis "Investor relations for private investors. A theoretical and empirical impact study" Tobias Harzer analyzes the impact of IR on private investors based on extensive empirical research. The study encompasses the IR activities of five companies and private investors' behavioral changes in the course of four months as well as possible interdependencies. He shows that private investors review IR information both heuristically, i.e. based on superficial information such as graphics depicting share price developments, and systematically, i.e. based on extensive and detailed information. The way investors handle information depends on their personal characteristics, such as their investment experience and their interest in the company.