No. 38: To Share or not to Share? Financial Analysts’ Questioning in Conference Calls

Abstract

We study whether financial analysts with superior information (i.e., better-informed analysts) strategically reveal less information during earnings conference calls, and whether this information-sharing behavior allows them to maintain or enhance their information advantage. By approximating sharing of ‘new’ information with the thematic difference between management’s presentation and analysts’ questions, we find that analysts with superior information (measured as their ex-ante forecast accuracy ranking) share relatively less information in their questions. Hereby, they reduce the information content of management’s responses, but increase the likelihood of maintaining or enhancing their information advantage (measured as their ex-post forecast accuracy ranking). By introducing the role of strategic questioning induced by analysts’ information advantages as a determinant of earnings conference calls’ informativeness, this study also sheds light on the role of information intermediaries in shaping firms’ information environments.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, European School of Management and Technology in Berlin and Goethe University Frankfurt who share the same research agenda.