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Speaking of the Short-Term: Disclosure Horizon and Managerial Myopia

56 Pages Posted: 6 Feb 2012 Last revised: 1 Feb 2017

Francois Brochet

Boston University - Department of Accounting

Maria Loumioti

The University of Texas at Dallas

George Serafeim

Harvard University - Harvard Business School

Date Written: September 12, 2015

Abstract

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.

Keywords: short termism, corporate performance, conference calls, investor base, risk, cost of capital

JEL Classification: G12, G14, G21, M41

Suggested Citation

Brochet, Francois and Loumioti, Maria and Serafeim, George, Speaking of the Short-Term: Disclosure Horizon and Managerial Myopia (September 12, 2015). Review of Accounting Studies, Volume 20, Issue 3, pp 1122–1163.. Available at SSRN: https://ssrn.com/abstract=1999484 or http://dx.doi.org/10.2139/ssrn.1999484

Francois Brochet

Boston University - Department of Accounting ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Maria Loumioti

The University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

George Serafeim (Contact Author)

Harvard University - Harvard Business School ( email )

381 Morgan Hall
Boston, MA 02163
United States

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=15705

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