Speaking of the Short-Term: Disclosure Horizon and Managerial Myopia
Boston University - Department of Accounting
University of Southern California
Harvard University - Harvard Business School
March 12, 2015
Harvard Business School Accounting & Management Unit Working Paper No. 12-072
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 associated with capital market pressures and executives’ short-term monetary incentives. Consistent with the language emphasized during conference calls partially capturing short-termism, we show that our proxy is associated with earnings and real activities management. 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: 56
Keywords: short termism, corporate performance, conference calls, investor base, risk, cost of capital
JEL Classification: G12, G14, G21, M41
Date posted: February 6, 2012 ; Last revised: April 25, 2015
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