Unveiling the Drivers of Analyst Coverage: The Role of the Head of Investor Relations

This paper aims to assess whether the characteristics of the team and head of investor relations (IR) of firms influence sell-side analysts’ coverage. The focus is on the largest European firms in the period from 2010 to 2022. Our findings suggest that IR turnover positively impacts analysts’ coverage. Regarding the tenure of the head of IR, results point out that the years in that position is negatively associated with the number of analysts who follow the firm, while the years of experience in the firm and experience in the industry are associated positively. Next, we analyze the characteristics of the head of IR. We find that gender and professional background are likely to influence analysts’ following. Overall, our findings shows that the engagement of analysts is especially driven by experienced and educated IR professionals.