Conference Calls and Information Asymmetry
36 Pages Posted: 5 Feb 2003
There are 2 versions of this paper
Conference Calls and Information Asymmetry
Date Written: August 2003
Abstract
We hypothesize that conference calls are voluntary disclosures that lead to long-term reductions in information asymmetry among equity investors. Cross-sectional and time-series tests show that the level of information asymmetry is negatively associated with conference call activity. We find that firms initiating a policy of holding periodic conference calls experience a sustained reduction in information asymmetry (although one-time callers experience no significant decline in asymmetry). Since prior work has shown that the cost of equity capital is increasing with information asymmetry, our results suggest that firms that hold conference calls more frequently have lower costs of capital.
Note: Previously titled "Voluntary Disclosure Frequency and Information Asymmetry"
Keywords: information asymmetry, voluntary disclosures, conference calls, microstructure, regulation
JEL Classification: D82, G10, M41, M45
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Christine Botosan and Marlene Plumlee
-
By Christine Botosan and Marlene Plumlee
-
By Paul M. Healy and Krishna Palepu
-
Information and the Cost of Capital
By Maureen O'hara and David Easley
-
Toward an Implied Cost of Capital
By William R. Gebhardt, Charles M.c. Lee, ...
-
Toward an Ex Ante Cost-of-Capital
By William R. Gebhardt, Charles M.c. Lee, ...
-
The World Price of Insider Trading
By Utpal Bhattacharya and Hazem Daouk
-
The Market Pricing of Earnings Quality
By Jennifer Francis, Ryan Lafond, ...