SSRN Home Search and Download Papers Browse Abstract and Paper Submission Subscribe to Networks View Briefcase Top Papers Top Authors Top Institutions
 
  go to Document Delivery
  Paper Stats:
   Abstract Views: 712
   Downloads: 0 		The Effect of Conference Calls on Analyst and Market Underreaction to Earnings Announcements

MICHAEL D. KIMBROUGH
Harvard Business School

Accounting Review, Forthcoming
 

Abstract:     
I extend prior research on the information content of conference calls by examining whether they accelerate analysts' and investors' responses to the future implications of currently announced earnings. I find that the initiation of conference calls is associated with a significant reduction in the serial correlation in analyst forecast errors, a measure of initial analyst underreaction. I also find that the initiation of conference calls is associated with significant reductions in two measures of initial investor underreaction: (1) post-earnings announcement drift and (2) the proportion of the total market reaction to firms' earnings announcements that is "delayed" (i.e. that is attributable to post-earnings announcement drift). The reduction in post-earnings announcement drift surrounding conference call initiation is concentrated in the set of sample firms where drift is most severe (i.e. the smallest, least heavily traded sample firms) while the largest, most heavily traded sample firms do not exhibit significant drift either before or after conference call initiation. Robustness tests, including analyses of matched samples of non-conference call firms, indicate that the results are not driven by general increases in analyst and investor sophistication over time or by contemporaneous increases in the information and trading environments of conference call initiators.

 
Keywords: Conference calls, post-earnings announcement drift, voluntary disclosure
 
JEL Classifications: M41, G14, G29
 
Accepted Paper Series
 


Contact Information for MICHAEL D. KIMBROUGH (Contact Author)

Email address for MICHAEL D. KIMBROUGH
Harvard Business School
Soldiers Field
Boston , MA 02163
United States


 
 
Email Abstract or URL
 
SSRN Resources
To search for other abstracts in the SSRN archival database, click here.

To order a membership to an SSRN Network or to subscribe to one or more of SSRN's journals, go to our online subscription request form.

To go to SSRN's main web site (www.ssrn.com), click here.

© 2008 Social Science Electronic Publishing, Inc. All Rights Reserved. Terms of Use
This page was served by apollo 4 in 0.141 seconds.