Does Silence Speak? An Empirical Analysis of Disclosure Choices during Conference Calls
Journal of Accounting Research, Vol. 48, No. 3, pp. 531-563
50 Pages Posted: 8 Sep 2008 Last revised: 2 Dec 2010
Date Written: January 4, 2010
In this paper, we exploit the open nature of conference calls to explore whether managers withhold information from the investing public. Our evidence suggests that managers regularly leave participants on the conference call in the dark by not answering their questions. We find that the best predictors of such an event are firm size, a CEO’s stock price–based incentives, company age, firm performance, litigation risk, and whether analysts are actively involved during the call’s Q&A section. Finally, we document strong support for the assumption maintained in the literature that investors interpret silence negatively. That is, investors seem to interpret no news as bad news.
Keywords: Discretionary disclosure, conference calls, incomplete disclosure, silence
JEL Classification: D21, J33, M41
Suggested Citation: Suggested Citation