No. 91: Strike the right tone: Financial analysts’ tone to acquire information in earnings conference calls

Jahr: 2022
Typ: Working Paper

Abstract

We study whether and how financial analysts choose tone during earnings conference calls as a means to acquire information from the firm’s management. Analyzing 32,963 analystmanager interactions during conference calls of the S&P 500 firms, we document that analyst questions that are characterized either by a higher absolute level of tone, negative phrasing, or both, are associated with more concrete, clearer, and more accurate management answers. We further document that analysts’ negative question phrasing is a function of firms’ risk exposure. Overall, we find that analysts with a higher absolute tone in their questions and more negative question phrasing issue more accurate earnings forecasts after the conference call. The findings are consistent with analysts’ tone in conference calls reflecting their demand for information to generate accurate earnings forecasts, suggesting that tone works as a strategic means to acquire information in conference calls.

Beteiligte Institutionen

Die Hauptstandorte vom TRR 266 sind die Universität Paderborn (Sprecherhochschule), die HU Berlin und die Universität Mannheim. Alle drei Standorte sind seit vielen Jahren Zentren für Rechnungswesen- und Steuerforschung. Hinzu kommen Wissenschaftler der LMU München, der Frankfurt School of Finance and Management, der Goethe-Universität Frankfurt, der Universität zu Köln und der Leibniz Universität Hannover, die die gleiche Forschungsagenda verfolgen.