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

Year: 2022
Type: Working Paper


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.

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, ESMT Berlin and Goethe University Frankfurt who share the same research agenda.

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