Test your knowledge with our IR papers quiz

Jun 15, 2018
A roundup of academic research from the world of IR studies


1. Does it pay for Indian firms to reveal their good CSR deeds?  



2.  When it comes to IPO investing, who is smarter?

Investors with better high school exam results in mathematics but without an academic degree

Investors with higher education, especially in social sciences, economics or public administration

3. Do forward-looking narratives affect investors’ valuation of firms?




4. Bad news disclosures are less readable than good news.  Why?

5. More companies are encountering direct institutional investor engagement on ESG issues. Are these engagements associated with subsequent reductions in downside risk at portfolio firms?



6. Equity analysts are increasingly hired by firms they cover. Are these analysts reliable?



7. When it comes to open-market stock repurchase announcements, which chief executive comes across as more credible and likely to follow through?



8. Which aspect of environmental disclosure is most likely to impact analysts’ recommendations? 




1. Not in rupees. A three-year study of Nifty 100 firms suggests companies that disclose spending on CSR to stakeholders make as much profit as those that don’t.

2. A study of Tallinn Stock Exchange investors finds those with higher education more likely to participate in IPOs. The researchers also find that the long-term returns of IPO stocks underperform their benchmark index.

3. Depends. The results of a UK study suggest that forward-looking information is seen as credible only for low-performing firms employing a Big Four auditor.

4. The results of a US experiment suggest this results mainly from attempts to write more readable good news reports rather than to intentionally obscure poor performance. To positively frame poor performance, managers focus more on the future, use the passive voice more and include fewer personal pronouns.

5. Yes. A study of almost 300 firms shows activist targets exhibit significantly lower downside risk vs matched controls – but the risk reduction effects vary across ESG engagement themes.

6. Maybe not. A University of California at Irvine study finds that prior to employment, analysts bias their earnings-per-share forecasts, target prices and recommendations in a direction that suggests they are trying to gain favor with their prospective employers.

7. Study results show that optimistic CEOs are more likely to buy back their shares after the announcements, and the abnormal returns following repurchase announcements are bigger for optimistic CEOs.

8. Recent research suggests only quality of environmental disclosure is associated with more favorable buy recommendations. Mere volume of disclosure can’t effectively signal environmental strategies.

Score (one point for each correct answer)

0-2: You know nothing about IR. Thank heavens you picked up this magazine!

3-5: You sit astride an unforgiving bell curve. Maybe experimental jazz is your thing?

6-8: Your company will nurture you. Your name will live on in history. Dogs like you.


This article originally appeared in the Summer 2018 issue of IR Magazine.

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