Workshop Series: Millicent Chang
Abstract Investor relations (IR) are costly activities, and a widely held view is that firms undertake them to increase share price over time. However, Hong and Huang (2005) assert that IR is undertaken for the personal benefit of insiders with large ownership stakes. We test Hong and Hong (2005) empirically, specifically by investigating the association between the activities of newly listed firms and insider equity ownership, as well as insider sales. The results support Hong and Huang's predictions where these firms are more likely to engage in broker presentations when insiders have a valuable ownership stake. Furthermore, when insiders sell a large portion of their shares, firms undertake different types of group presentations. Therefore, insiders contemplate their personal incentives when setting IR policy such that IR is not necessarily undertaken for the benefit of all shareholders.
Millicent Chang joined UWA as an associate lecturer in 1992 and completed her PhD in Accounting in 2002. Her thesis examined the transfer of accounting and other information for a sample of Australian firms. Her current research interests lie in the areas of insider trading and disclosure in capital markets. Millicent teaches business valuation, financial statement analysis and corporate finance.