Task-Oriented Speech in Earnings Conference Calls and Information Processing

54 Pages Posted: 9 Jul 2020 Last revised: 16 Oct 2021

See all articles by Vineet Bhagwat

Vineet Bhagwat

George Washington University - Department of Finance

Sara Shirley

Middle Tennessee State University

Jeffrey Stark

Middle Tennessee State University

Date Written: June 16, 2020

Abstract

We examine the impact of task-oriented speech (TOS) on market participants’ ability to process information, where TOS quantifies a more direct method of communication. Conference calls with greater TOS are associated with lower ex-post total and idiosyncratic volatility and abnormal trading volume, even after controlling for ex-ante implied volatility. TOS also impacts financial analysts: forecast error, magnitude of revisions, forecast dispersion and disagreement are lower during the subsequent quarter. Overall, greater use of TOS increases the ability of financial markets to effectively evaluate the information within an earnings conference call.

Keywords: Information Processing, Conference Calls, Natural Language Processing, Financial Markets

JEL Classification: G00, G10, G12, G14

Suggested Citation

Bhagwat, Vineet and Shirley, Sara and Stark, Jeffrey, Task-Oriented Speech in Earnings Conference Calls and Information Processing (June 16, 2020). Available at SSRN: https://ssrn.com/abstract=3628514 or http://dx.doi.org/10.2139/ssrn.3628514

Vineet Bhagwat

George Washington University - Department of Finance ( email )

2023 G Street
Washington, DC 20052
United States

Sara Shirley

Middle Tennessee State University ( email )

Murfreesboro, TN 37132
United States

Jeffrey Stark (Contact Author)

Middle Tennessee State University ( email )

Murfreesboro, TN
United States

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