The collaborative paper titled "Retail Investors Matter: The Value of Corporate Interactions" by Professor Jing Shi, Chief Expert of the Base, has been published in Research in International Business and Finance.

Research in International Business and Finance is committed to publishing high-quality academic papers that explore cutting-edge issues in the field of international finance, particularly interdisciplinary research and the interaction between finance and society.

Abstract：While the importance of corporate interactions with large or institutional investors has attracted much research attention, the value of such interactions with retail investors remains largely unexplored. In this study, we investigate the impact of corporate interactions with retail investors on the cost of equity capital, using a comprehensive dataset of dialogues extracted from online corporate interactive communication platforms launched by two major Chinese stock exchanges in the 2010 s. We find that firms that actively engage with retail investors have significantly lower costs of equity capital, and this effect is particularly pronounced when these investors hold a larger proportion of ownership. Our findings suggest that the interactions between firms and retail investors lead to a reduction in the cost of equity capital, primarily by mitigating the difficulties these investors face in processing information and enhancing their confidence in the firm.

Link：https://doi.org/10.1016/j.ribaf.2024.102226

Author profile

Jing Shi is currently a Professor of Finance at Zhongnan University of Economics and Law and the Chief Expert of the Innovation and Talent Base for Digital Technology and Finance. He has been selected into the national high-level talent program and holds a PhD in Finance from the Australian National University. Currently, he is a Fellow of the Accounting and Finance Association of Australia and New Zealand, a Council Member of the Asian Finance Association, and the Deputy Editor of the SSCI-indexed journal Accounting and Finance, as well as the Area Editor of Journal of Accounting Literature and the Associate Editor of Research in International Business and Finance. His research areas include financial technology, empirical corporate finance, corporate governance, bond ratings, and corporate business strategies, with a primary focus on the Chinese economy and financial markets. He has published over 70 academic papers in domestic and international journals such as American Economic Review, Journal of Political Economy, Administrative Science Quarterly, Strategic Management Journal, Management Science, Review of Finance, and Economic Research.