Abstract

http://ssrn.com/abstract=1999484
 
 

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Speaking of the Short-term: Disclosure Horizon and Capital Market Outcomes


Francois Brochet


Boston University - Department of Accounting

Maria Loumioti


University of Southern California

George Serafeim


Harvard University - Harvard Business School

October 2014

Harvard Business School Accounting & Management Unit Working Paper No. 12-072

Abstract:     
We study conference calls as a voluntary disclosure channel and create a proxy for the time horizon that senior executives emphasize in their communications. We find that our measure of disclosure time horizon is not only related to the underlying economics of the firm, but also to short-term incentives and capital market pressures. Consistent with the language emphasized during conference calls partially capturing short-termism, we show that it is associated with myopic behavior. Moreover, we show that short-term disclosure horizon predicts lower future accounting and stock price performance. Overall, the results show that the time horizon of conference call narratives can be informative about managers’ myopic behavior.

Number of Pages in PDF File: 67

Keywords: short termism, corporate performance, conference calls, investor base, risk, cost of capital

JEL Classification: G12, G14, G21, M41

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Date posted: February 6, 2012 ; Last revised: October 12, 2014

Suggested Citation

Brochet, Francois and Loumioti, Maria and Serafeim, George, Speaking of the Short-term: Disclosure Horizon and Capital Market Outcomes (October 2014). Harvard Business School Accounting & Management Unit Working Paper No. 12-072. Available at SSRN: http://ssrn.com/abstract=1999484 or http://dx.doi.org/10.2139/ssrn.1999484

Contact Information

Francois Brochet
Boston University - Department of Accounting ( email )
595 Commonwealth Avenue
Boston, MA 02215
United States
Maria Loumioti
University of Southern California ( email )
Los Angeles, CA 90089
United States
George Serafeim (Contact Author)
Harvard University - Harvard Business School ( email )
381 Morgan Hall
Boston, MA 02163
United States
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=15705
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