The Value of Public Relations in Investor Relations: Individual Investors' Preferred Information Types, Qualities, and Sources

Abstract

A survey targeting individual investors addressed the types, qualities, and sources of information this specific public seeks and values. In keeping with uses and gratifications theory and situational theory of problem solving, results identify specific conditions associated with investors seeking and selecting sources of information that would be considered public relations content, validating public relations and investor relations communication as having value to a specific set of individual investors. This study provides evidence that public relations communications content has as much or more value than information from the news media or other sources in an investor relations context.

How much is enough? An investigation of nonprofessional investors information search and stopping rule use

“…Our results are also consistent with prior survey studies of investor information search such as Elliott et al (2008) and Penning (2011). The survey questions used to measure investors' use of financial reports and SEC filings in the Elliott et al (2008) study have a reported mean value of 2.5 on a scale of 1 (seldom use) to 5 (often use).…”

“…The survey questions used to measure investors' use of financial reports and SEC filings in the Elliott et al (2008) study have a reported mean value of 2.5 on a scale of 1 (seldom use) to 5 (often use). Penning (2011) reports a similar result from a survey of individual investors-they reported using the annual report less than 50% of the time. However, these studies do not consider information-processing limitations (i.e., surveys contain many more items than can be processed by the investor).…”

Identifying Active Hot-Issue Communicators and Subgroup Identifiers

“…To tackle this problem, J.-N. Kim and J. E. Grunig (2011) proposed a more generalized theory—situational theory of problem solving (STOPS)—to expand STP’s explanatory power to a wider set of communicative actions of publics involving a problem-solving situation. There has been some testing of STOPS as a revision of STP (e.g., J.-N. Kim & J. E. Grunig, 2011; J.-N. Kim, Ni, S-H. Kim, & J. R. Kim, 2012; Penning, 2011), but further examination is necessary.…”

The Relationship Between Organizational Culture and Public Relations in Business Organizations

“…In these countries, public relations make up the bulk of organizational communications, through which organizations form strong relationships with key audiences, which certainly contributes greatly to the achievement of their mission and strategic goals. In the reference (Penning, 2011), examined was how stockholders (investors) value public relations communication. It was found that investors value information from PR professionals (directly from a company) more than that from news media and other sources.…”