Casting Conference Calls

• 成果类型: Article
• 署名作者: Cohen, Lauren; Lou, Dong; Malloy, Christopher J.
• 署名单位: Harvard University; National Bureau of Economic Research; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3423
• 发表日期: 2020
• 页码: 5015-5039
• 关键词: information; strategic release; FIRMS; CONFERENCE CALLS

摘要

We explore a subtle but important mechanism through which firms can control information flow to the markets. We find that firms that cast their conference calls by disproportionately calling on bullish analysts tend to underperform in the future. Firms that call on more favorable analysts experience more negative future earnings surprises and more future earnings restatements. A long-short portfolio that exploits this differential firm behavior earns abnormal returns of up to 149 basis points per month or almost 18% per year. We find similar evidence in an international sample of earnings call transcripts from the United Kingdom, Canada, France, and Japan. Firms with higher discretionary accruals, firms that barely meet/exceed earnings expectations, and firms (and their executives) that are about to issue equity, sell shares, and exercise options are all significantly more likely to cast their earnings calls.