Buy‐Side Analysts and Earnings Conference Calls

Posted: 15 Aug 2018

See all articles by Michael J. Jung

Michael J. Jung

University of Delaware - Accounting & MIS

M.H. Franco Wong

University of Toronto - Rotman School of Management

Frank Zhang

Yale School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: June 1, 2018

Abstract

Companies’ earnings conference calls are perceived to be venues for sell‐side equity analysts to ask management questions. In this study, we examine another important conference call participant — the buy‐side analyst — that has been under-explored in the literature due to data limitations. Using a large sample of transcripts, we identify 3,834 buy‐side analysts from 701 institutional investment firms who participated (i.e., asked a question) in 13,332 conference calls to examine the determinants and implications of their participation. Buy‐side analysts are more likely to participate when sell‐side analyst coverage is low and dispersion in sell‐side earnings forecasts is high, consistent with buy‐side analysts participating when a company's information environment is poor. Institutional investors trade more of a company's stock in the quarters in which their buy‐side analysts participate in the call. Finally, we find evidence that buy‐side analyst participation is associated with company‐level absolute changes in future stock price, trading volume, institutional ownership, and short interest.

Keywords: Buy-Side Analysts, Institutional Investors, Sell-Side Analysts, Earnings Conference Calls

JEL Classification: G10, G30, M41

Suggested Citation

Jung, Michael J. and Wong, M.H. Franco and Zhang, Frank, Buy‐Side Analysts and Earnings Conference Calls (June 1, 2018). Journal of Accounting Research, Vol. 56, No. 3, 2018. Available at SSRN: https://ssrn.com/abstract=3224562

Michael J. Jung (Contact Author)

University of Delaware - Accounting & MIS ( email )

Alfred Lerner College of Business and Economics
Newark, DE 19716
United States

M.H. Franco Wong

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-0729 (Phone)

HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Wong.aspx

Frank Zhang

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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