The Effect of Manager-Specific Optimism on the Tone of Earnings Conference Calls

55 Pages Posted: 10 Jan 2012 Last revised: 23 Jan 2014

See all articles by Angela K. Davis

Angela K. Davis

University of Oregon

Weili Ge

University of Washington - Michael G. Foster School of Business

Dawn A. Matsumoto

University of Washington - Department of Accounting

Jenny Li Zhang

University of British Columbia - Sauder School of Business

Date Written: January 13, 2014

Abstract

The use of more or less optimistic language in corporate disclosures has been the subject of increased interest in the academic literature. We add to this stream of research by examining the manager-specific component in the tone of earnings-announcement related conference calls. We find that the tone of conference calls that is not explained by current performance, future performance, and strategic incentives has a significant manager-specific component. We also find that tone is significantly associated with manager-specific factors such as early career experiences, and involvement in charitable organizations. Taken together, our findings indicate that, in addition to reflecting current and future performance, the use of more or less optimistic language in conference calls is significantly influenced by a manager-specific tendency to be optimistic or pessimistic. We also find some evidence of a manager-specific component to conference call returns, which is consistent with manager-specific optimism impacting investors’ interpretation of disclosures made in conference calls.

Keywords: managerial style, conference call, tone

JEL Classification: M41

Suggested Citation

Davis, Angela K. and Ge, Weili and Matsumoto, Dawn and Zhang, Jenny Li, The Effect of Manager-Specific Optimism on the Tone of Earnings Conference Calls (January 13, 2014). CAAA Annual Conference 2012. Available at SSRN: https://ssrn.com/abstract=1982259 or http://dx.doi.org/10.2139/ssrn.1982259

Angela K. Davis

University of Oregon ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States
541-346-3210 (Phone)

Weili Ge

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Dawn Matsumoto

University of Washington - Department of Accounting ( email )

224 Mackenzie Hall, Box 353200
Seattle, WA 98195-3200
United States
206-543-4454 (Phone)
206-685-9392 (Fax)

Jenny Li Zhang (Contact Author)

University of British Columbia - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Register to save articles to
your library

Register

Paper statistics

Downloads
575
rank
45,485
Abstract Views
3,255
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information