Broker-Hosted Investor Conferences
Broker-hosted investor conferences are invitation-only events that allow select clients to interact with firm management. We examine the determinants and consequences of conference participation for the hosting broker and participating firms. We find that company participation is positively related to institutional ownership and intangible assets, consistent with brokers catering to institutional clients and greater investor demand for management access among hard-to-value firms. Company participation is also negatively related to firm age and positively related to future capital raising activity, suggesting firms view conferences as a means to enhance investor recognition. Using a sample of institutional transactions, we find that conferences have a significant effect on broker revenues in the days following the event. The effect on commissions is larger when conference returns are more extreme, suggesting a connection between broker’s compensation and the information content of firm disclosure. Companies also benefit from conference attendance, experiencing improvements in liquidity, analyst coverage, and institutional.
This seminar is organised by the Erasmus Accounting Research Group.