Does Silence Speak? An Empirical Analysis of Disclosure Choices During Conference Calls

Does Silence Speak? An Empirical Analysis of Disclosure Choices During Conference Calls ABSTRACT In this paper, we exploit the open nature of conference calls to explore whether managers withhold information from the investing public. Our evidence suggests that managers regularly leave participants on the conference call in the dark by not answering their questions. We find that the best predictors of such an event are firm size, a CEO's stock price–based incentives, company age, firm performance, litigation risk, and whether analysts are actively involved during the call's Q&A section. Finally, we document strong support for the assumption maintained in the literature that investors interpret silence negatively. That is, investors seem to interpret no news as bad news. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting Research Wiley

Does Silence Speak? An Empirical Analysis of Disclosure Choices During Conference Calls

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Publisher
Wiley
Copyright
©, University of Chicago on behalf of the Accounting Research Center, 2010
ISSN
0021-8456
eISSN
1475-679X
D.O.I.
10.1111/j.1475-679X.2010.00365.x
Publisher site
See Article on Publisher Site

Abstract

ABSTRACT In this paper, we exploit the open nature of conference calls to explore whether managers withhold information from the investing public. Our evidence suggests that managers regularly leave participants on the conference call in the dark by not answering their questions. We find that the best predictors of such an event are firm size, a CEO's stock price–based incentives, company age, firm performance, litigation risk, and whether analysts are actively involved during the call's Q&A section. Finally, we document strong support for the assumption maintained in the literature that investors interpret silence negatively. That is, investors seem to interpret no news as bad news.

Journal

Journal of Accounting ResearchWiley

Published: Jun 1, 2010

References

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