Abstract

http://ssrn.com/abstract=2449341
 


 



The Price of Silence: When No One Asks Questions During Conference Calls


Shuping Chen


University of Texas at Austin - Red McCombs School of Business

Stephan Hollander


Tilburg University - Tilburg School of Economics and Management

Kelvin Law


Tilburg University

February 13, 2015


Abstract:     
The absence of information acquisition activity in live conference calls can cause market frictions and have adverse economic consequences. When no one asks questions during a conference call’s Q&A session, firms experience a 13% higher increase in bid-ask spread and their next-day abnormal returns are 72 basis points lower ($5.4-5.9 million per call) compared to a propensity score matched control group. Our results extend to conference calls where the number of questions raised falls far below expectations, and hold across three identification strategies. This study complements recent work in finance by showing that absence of information acquisition activity by (or on behalf of) investors, in addition to absence of managerial disclosures, contains information and has important implications for managers in improving their investor relations programs.

Number of Pages in PDF File: 61

Keywords: Conference calls, market frictions, information asymmetry, investor relations

JEL Classification: M41, G12, G14


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Date posted: June 14, 2014 ; Last revised: February 18, 2015

Suggested Citation

Chen, Shuping and Hollander, Stephan and Law, Kelvin, The Price of Silence: When No One Asks Questions During Conference Calls (February 13, 2015). Available at SSRN: http://ssrn.com/abstract=2449341 or http://dx.doi.org/10.2139/ssrn.2449341

Contact Information

Shuping Chen (Contact Author)
University of Texas at Austin - Red McCombs School of Business ( email )
Austin, TX 78712
United States
521.471.5328 (Phone)
Stephan Hollander
Tilburg University - Tilburg School of Economics and Management ( email )
P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands
+31 13 466 8288 (Phone)
+31 13 466 8001 (Fax)
HOME PAGE: http://www.uvt.nl/people/s.hollander
Kelvin Law
Tilburg University ( email )
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
HOME PAGE: http://sites.google.com/site/kelvinlaw2012
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