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The authors of this paper examine the key actions and outcomes of Investor Relations (IR) programs. Through interviews with IR professionals, we learn that attracting institutional investors in a common goal of IR strategies, with direct access to management, rather than increased disclosure, seen as a key driver of the strategy's success. They test for the impacts of IR programs by examining small-cap companies that hired external IR firms in a differences-in-differences research design with controls for changes in disclosure and determinants of the decision to initiate IR. They find that companies initiating IR programs exhibit substantial increases in institutional investor ownership, along with a shift toward investors that normally would not be aware of the companies.
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