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Corporate communication and shareholder base retention: evidence from spin-offs

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  • Ryan P. McDonough

    (Rutgers, The State University of New Jersey)

Abstract

I ask whether corporate communication programs influence shareholder base retention. I use spin-offs to study the communication programs of the spun-off business units that inherit their parent firms’ shareholders. Unit firms that initiate a communication program maintain higher levels of post-spin-off institutional ownership and retain more of the inherited institutional shareholder base than firms that do not communicate. An important benefit of communication is that these firms avoid the stock price pressure commonly experienced by unit firms following a sell-off by the inherited institutional shareholder base. This paper extends our understanding of the role of communication in retaining institutional shareholders.

Suggested Citation

  • Ryan P. McDonough, 2023. "Corporate communication and shareholder base retention: evidence from spin-offs," Review of Quantitative Finance and Accounting, Springer, vol. 60(4), pages 1283-1327, May.
    • Handle: RePEc:kap:rqfnac:v:60:y:2023:i:4:d:10.1007_s11156-023-01129-4
    DOI: 10.1007/s11156-023-01129-4
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    More about this item

    Keywords

    Disclosure; Institutional investors; Investor relations;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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