The Price of Silence: When No One Asks Questions during Conference Calls
University of Texas at Austin - Red McCombs School of Business
Tilburg University - Tilburg School of Economics and Management
July 15, 2015
This paper documents unintended adverse consequences of absence of information acquisition activity in firms' conference calls. When no one asks questions during a conference call’s questionand-answer (Q&A) session, firms experience a 13% smaller reduction in information asymmetry and downward pressure on their stock price (i.e., next-day abnormal return is 72 basis points lower). Our results hold across three identification strategies, and extend to conference calls where the number of questions raised falls far below expectations. Our analysis contributes to a nascent literature by showing that, in addition to the absence of managerial disclosure activity, absence of information acquisition activity contains information, and has direct implications for managers in improving their investor relations programs.
Number of Pages in PDF File: 63
Keywords: Conference calls, corporate disclosure, information asymmetry, investor relations
JEL Classification: M41, G12, G14
Date posted: June 14, 2014 ; Last revised: July 16, 2015
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