Oh What a Beautiful Morning! Diurnal Influences on Executives and Analysts: Evidence from Conference Calls

Management Science, Vol. 64, No. 12, pp. 5899-5924

56 Pages Posted: 9 Dec 2012 Last revised: 5 Feb 2019

See all articles by Jing Chen

Jing Chen

University at Buffalo, SUNY

Elizabeth A. Demers

University of Lausanne - Department of Accounting and Control

Baruch Lev

New York University - Stern School of Business

Abstract

This study provides novel evidence that expert economic agents’ work-related activities are systematically influenced by the time-of-day. We use archival data derived from time-stamped quarterly earnings conference calls together with linguistic algorithms to measure and track the moods of executives and analysts at different times of the day. The evidence indicates that the tone of conference call discussions deteriorates markedly over the course of the trading day, with both analysts’ and executives’ moods becoming more negative as the day wears on. Capital market pricing tests reveal that the time-of-day-induced negative tone leads to temporary stock mispricings. Our findings are relevant because the diurnal variations in behavior documented in the context of quarterly earnings calls are likely to extend across other important corporate communication, decision-making, and performance situations, leading to potentially significant economic consequences.

Keywords: conference calls, textual analysis, management communication, investor relations, circadian rhythms, diurnal variations, abnormal returns, behavioral economics

JEL Classification: G02, G14, M41

Suggested Citation

Chen, Jing and Demers, Elizabeth A. and Lev, Baruch Itamar, Oh What a Beautiful Morning! Diurnal Influences on Executives and Analysts: Evidence from Conference Calls. Management Science, Vol. 64, No. 12, pp. 5899-5924. Available at SSRN: https://ssrn.com/abstract=2186862 or http://dx.doi.org/10.2139/ssrn.2186862

Jing Chen

University at Buffalo, SUNY ( email )

Jacobs Management Center
Buffalo, NY 14260-1660
United States

Elizabeth A. Demers (Contact Author)

University of Lausanne - Department of Accounting and Control ( email )

UNIL-Dorigny
Anthropole
Lausanne, 1015
Switzerland

Baruch Itamar Lev

New York University - Stern School of Business ( email )

40 West 4th Street, Suite 400
New York, NY 10012
United States
212-998-0028 (Phone)
212-995-4001 (Fax)

HOME PAGE: http://www.baruch-lev.com

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