A Level Playing Field? Empirical Evidence That Ethnic Minority Analysts Face Unequal Access to Corporate Managers

Abstract

We investigate whether ethnic minority analysts face unequal access to management on public earnings conference calls. We find minority analysts are underrepresented in the Q&A sessions of public earnings conference calls, and minority analysts who do participate receive lower levels of prioritization and engagement than nonminority analysts. Disparities in minority analysts’ participation are reduced in companies facing greater public scrutiny and heightened in companies found to have engaged in discriminatory employment practices. The disparities we document do not appear to be related to analysts’ innate personality characteristics. However, we find some evidence that diverse executive teams are associated with more favorable participation outcomes for minority analysts. The consequences of unequal access extend beyond conference calls, as investors are less likely to vote for minority analysts as Institutional Investor All-Stars.

Keywords: ethnic discrimination, ethnic bias, ethnic diversity, financial analysts, management access, earnings conference calls, All-Star analysts, institutional investors

JEL Classification: J15, J71, D22, G02, G20, G23, G24, G28, M40