An Investigation of Analysts' Praise of Management During Earnings Conference Calls

Milian, Jonathan A.; Smith, Antoinette L.

doi:10.1080/15427560.2017.1276068

Cited by 22 publications

(9 citation statements)

References 41 publications

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“…Second, we contribute to research on earnings conference calls (Hollander et al, 2010;Matsumoto et al, 2011;Larcker and Zakolyukina, 2012;Mayew and Venkatachalam, 2012;Brochet et al, 2015;Bushee et al, 2015;Davis et al, 2015;Lee, 2016). 2 Direct evidence on the properties of analysts' questions is sparse and limited to assessments of their pooled predictive ability and response to management tone (Allee and DeAngelis, 2015;Brockman et al, 2015;Chen et al, 2015;Milian and Smith, 2015). Ours is the first study of which we are aware to analyse question-level properties as a means of shedding light on analysts' information acquisition behaviour.…”

Section: From Conference Call Questions and Research Notes Introductionmentioning

confidence: 95%

Does equity analyst research lack rigour and objectivity? Evidence from conference call questions and research notes

Salzedo

Young

El-Haj

2016

Accounting and Business Research

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Tel ++44 (0) 1524 594242; Email s.young@lancaster.ac.uk. We are grateful for very helpful comments from two anonymous reviewers whose suggestions significantly improved the paper. Comments and suggestions were also provided by Kathleen AbstractDoubts have been raised about the rigour and objectivity of sell-side analysts' research due to institutional structures that promote pro-management behaviour. However, research in psychology stresses the importance of controlling for biases in individuals' inherent cognitive processing behaviour when drawing conclusions about their propensity to undertake careful scientific analysis. Using social cognition theory, we predict that the rigour and objectivity evident in analyst research is more pronounced following unexpected news in general and unexpected bad news in particular. We evaluate this prediction against the null hypothesis that analyst research consistently lacks rigour and objectivity to maintain good relations with management. Using U.S. firm earnings surprises as our conditioning event, we examine the content of analysts' conference call questions and research notes to assess the properties of their research. We find that analysts' notes and conference call questions display material levels of rigour and objectivity when earnings news is unexpectedly positive, and that these characteristics are more pronounced in response to unexpectedly poor earnings news. Results are consistent with analysts' innate cognitive processing response counteracting institutional considerations when attributional search incentives are strong. Exploratory analysis suggests that studying verbal and written outputs provides a more complete picture of analysts' work.

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Section: From Conference Call Questions and Research Notes Introductionmentioning

confidence: 95%

Does equity analyst research lack rigour and objectivity? Evidence from conference call questions and research notes

Salzedo

Young

El-Haj

2016

Accounting and Business Research

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“…They document that the short seller can better understand the language of management than investors at large. Milian and Smith ( 2017 ) find that complimentary language by analysts in earnings conference calls positively predicts the subsequent stock returns. More recently, several studies find that qualitative information related to a specific topic (e.g., political risk, COVID-19) is reflected in stock market returns (Hassan et al 2019 , 2021 ).…”

Section: Related Literature and Theoretical Frameworkmentioning

confidence: 99%

Corporate climate risk and stock market reaction to performance briefings in China

Xiao

Liu

et al. 2022

Environ Sci Pollut Res

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This study aims to enrich our understanding of the valuation consequence of climate risk in financial markets. The primary focus of our study is on the stock price reaction to firms’ climate-risk-related information. We employ transcripts of Chinese listed firms’ performance briefings to capture the climate risk at the firm level. Using a sample of Chinese listed firms between 2009 and 2021, we find that greater corporate climate risks lead to negative market reactions over a short time window, consistent with the market quickly comprehending corporate climate risks. This result holds for a series of robustness checks. We further find that the negative impact of corporate climate risk on the stock price reaction operates through the increased market trading activities, greater investor attention, and reduced positive media coverage. Finally, we demonstrate that industry carbon emission, local abnormal temperature, state ownership, institutional shareholding, and dividend payout are important moderators that shape the association of the corporate climate risk and the adverse market reaction. Our evidence suggests that disclosures of climate-related information can help the stock market to price climate risk more efficiently.

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“…As teleconferências de resultados são habitualmente realizadas após o anúncio trimestral dos resultados financeiros (MILIAN;SMITH, 2017). Esse evento corporativo oportuniza a interação verbal entre os representantes e os analistas que acompanham a companhia.…”

Section: Introductionunclassified

Uma revisão sistemática sobre teleconferências de resultados como meio de divulgação voluntária no mercado de capitais

Tonin

Scherer

2020

Enf.:Ref. Cont.

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Este artigo fornece uma visão geral da literatura de pesquisa sobre as teleconferências de resultados como um meio de divulgação voluntária. A revisão sistemática abarca a pesquisa, a estruturação e a sintetização dos estudos empíricos que utilizaram termos como tone; conference calls; disclosure; analysts; managers e voluntary, para avaliar o desenvolvimento recente. Os tópicos de destaque incluem a revisão das principais óticas de análise sobre as teleconferências de resultados e os principais tipos de pesquisa que usam esse objeto de estudo. Na literatura sobre teleconferências de resultados, são apontadas abordagens empíricas tanto qualitativas como quantitativas. Além disso, há estudos sobre gerenciamento de resultados, assimetria da informação e reação do mercado, que abrangem a divulgação voluntária. Dentre os resultados de pesquisa, cabe destacar a disseminação de artigos que medem a variável tom, com a utilização predominante do dicionário de Loughran e McDonald (2011). Como a abordagem para reação do mercado utiliza-se o Cumulative Abnormal Return (CAR), que é focada principalmente em examinar a influência do tom transcrito nas teleconferências de resultados sobre a reação do mercado acionário.

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An Investigation of Analysts' Praise of Management During Earnings Conference Calls

Cited by 22 publications

References 41 publications

Does equity analyst research lack rigour and objectivity? Evidence from conference call questions and research notes

Does equity analyst research lack rigour and objectivity? Evidence from conference call questions and research notes

Corporate climate risk and stock market reaction to performance briefings in China

Uma revisão sistemática sobre teleconferências de resultados como meio de divulgação voluntária no mercado de capitais

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