Open Versus Closed Conference Calls: The Determinants and Effects of Broadening Access to Disclosure

Abstract

Recent advances in information technology allow firms to provide broader access to their disclosures. We examine the determinants and effects of the decision to provide unlimited real-time access to conference calls (i.e., "open" conference calls). Our evidence suggests that the decision to provide open calls is associated with the composition of a firm's investor base and, to some degree, the complexity of its financial information. We also find that open calls are associated with a greater increase in small trades (consistent with individuals trading on information released during the call) and higher price volatility during the call period.

Keywords: conference calls, corporate disclosure, selective disclosure, price volatility, institutional investors

JEL Classification: M41, M44, G12, G14, G39, K22