Can investors detect managers' lack of spontaneity?
Lee, Joshua
Can investors detect managers' lack of spontaneity? : Adherence to predetermined scripts during earnings conference calls / Joshua Lee . -- Páginas 229 a la 250
Reseña : This paper examines whether market participants infer negative information about future unexpected firm performance when managers adhere to pre-determined scripts when responding to questions during earnings conference calls. I argue that managers respond to questions from prepared scripts to avoid the disclosure of bad news. Using a measure of the adherence to pre-determined language, I provide evidence that a lack of spontaneity is negatively associated with the market reaction to the call and with the abnormal returns in the subsequent quarter. I further find that analysts downgrade their forecasts following these calls. I also provide evidence that adherence to pre-determined language is negatively associated with future unexpected firm accounting performance, supporting investors’ negative response to it. Finally, I find that bid-ask spreads increase and firms are less likely to guide future earnings when managers adhere to the pre-determined language of a script, suggesting that firms provide less information, not more, during these calls..
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Can investors detect managers' lack of spontaneity? : Adherence to predetermined scripts during earnings conference calls / Joshua Lee . -- Páginas 229 a la 250
Reseña : This paper examines whether market participants infer negative information about future unexpected firm performance when managers adhere to pre-determined scripts when responding to questions during earnings conference calls. I argue that managers respond to questions from prepared scripts to avoid the disclosure of bad news. Using a measure of the adherence to pre-determined language, I provide evidence that a lack of spontaneity is negatively associated with the market reaction to the call and with the abnormal returns in the subsequent quarter. I further find that analysts downgrade their forecasts following these calls. I also provide evidence that adherence to pre-determined language is negatively associated with future unexpected firm accounting performance, supporting investors’ negative response to it. Finally, I find that bid-ask spreads increase and firms are less likely to guide future earnings when managers adhere to the pre-determined language of a script, suggesting that firms provide less information, not more, during these calls..
Contabilidad--Publicaciones seriadas
Ejecutivos--Responsabilidad profesional--Publicaciones seriadas
Análisis del discurso--Publicaciones seriadas
Capitalistas--Publicaciones seriadas