Does silence speak? An empirical analysis of disclosure choices during conference calls

S. Hollander, M. Pronk, E. Roelofsen

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Pages (from-to)531-563
JournalJournal of Accounting Research
Volume48
Issue number3
Publication statusPublished - 2010

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Conference calls
Disclosure
Investors
Managers
News
Empirical analysis
Question answering
Investing
Firm size
Chief executive officer
Analysts
Incentives
Firm performance
Predictors
Litigation risk

Cite this

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title = "Does silence speak? An empirical analysis of disclosure choices during conference calls",
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Does silence speak? An empirical analysis of disclosure choices during conference calls. / Hollander, S.; Pronk, M.; Roelofsen, E.

In: Journal of Accounting Research, Vol. 48, No. 3, 2010, p. 531-563.

Research output: Contribution to journalArticleScientificpeer-review

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AB - 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.

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