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The Effect of Conference Calls on Analysts' Forecasts - German Evidence


Moritz Bassemir


Goethe University Frankfurt

Zoltán Novotny-Farkas


Lancaster University - Management School

Julian Pachta


Goethe University Frankfurt

October 31, 2011

European Accounting Review, Volume 22, Issue 1, May 2013

Abstract:     
This study examines whether conference calls provide additional information to analysts. For a large sample of conference calls, hosted by German firms between 2004 and 2007, our results show that conference calls improve analysts’ ability to forecast future earnings accurately. This suggests that additional information is released during conference calls. The reduction in forecast error is economically significant and larger in magnitude when compared to results for the US (Bowen et al., 2002). These findings are consistent with the notion that commiting to additional disclosures is likely to yield greater effects in a less stringent disclosure system (Verrecchia, 2001). Since the majority of our sample firms conduct conference calls as closed calls, the evidence of this paper suggests that conference calls may contribute to an information gap between call participants and non-invited parties. Our findings should be of substantial interest to European regulators seeking to level the informational playing field for all investors.

Number of Pages in PDF File: 42

Keywords: Analyst Conferences, Conference Calls, Disclosure Regulation, Financial Analysts, Forecast Accuracy, Information Environment

JEL Classification: G14, G15, G18, K22

Accepted Paper Series


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Date posted: October 13, 2010 ; Last revised: May 8, 2013

Suggested Citation

Bassemir, Moritz and Novotny-Farkas, Zoltán and Pachta, Julian, The Effect of Conference Calls on Analysts' Forecasts - German Evidence (October 31, 2011). European Accounting Review, Volume 22, Issue 1, May 2013. Available at SSRN: http://ssrn.com/abstract=1691183

Contact Information

Moritz Bassemir (Contact Author)
Goethe University Frankfurt ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
HOME PAGE: http://www.accounting.uni-frankfurt.de/index.php?id=1072
Zoltán Novotny-Farkas
Lancaster University - Management School ( email )
Lancaster, LA1 4YX
United Kingdom
Julian Pachta
Goethe University Frankfurt ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
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