Challenging Management in Public

48 Pages Posted: 21 Nov 2017

See all articles by Maximilian Rohrer

Maximilian Rohrer

NHH - Norwegian School of Economics

Date Written: November 17, 2017


This paper provides evidence on institutional investors exerting governance by participating in conference calls surrounding merger announcement. Consistent with a number of governance theories, we document that the likelihood of participation increases in the ownership in the hosting firm and decreases the probability of future exit. Participation by institutional investors leads to a 25 basis points increase in stock price during the first hour after the start of the call. We document that questions asked by institutional investors not only are more negative, but also predict future return, in contrast to other call participants such as sell-side analysts. We conclude that call participation by institutional investors is an effective governance channel that creates value to shareholders.

Keywords: corporate governance, institutional investors, conference calls, text analysis

JEL Classification: G3

Suggested Citation

Rohrer, Maximilian, Challenging Management in Public (November 17, 2017). Available at SSRN: or

Maximilian Rohrer (Contact Author)

NHH - Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen

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