Analysts' Strategic Information Revelation in Conference Calls

54 Pages Posted: 28 May 2021 Last revised: 1 Apr 2022

See all articles by Julia Haag

Julia Haag

LMU Munich School of Management

Christian Hofmann

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management)

Alexander Paulus

LMU Munich School of Management

Nina Schwaiger

LMU Munich

Thorsten Sellhorn

Ludwig-Maximilians-Universitaet (LMU) Munich; LMU Munich

Date Written: March 2022

Abstract

We study information revelation via analysts’ questions in earnings conference calls and its implications for firms’ information environments. Better-informed analysts (who have higher ex-ante forecast accuracy) reveal less new information in their questions than less-informed analysts. Consistent with strategic safeguarding of their information advantage, analysts reveal less (more) information when exposed to strong competition (high information uncertainty). Information revelation is linked to ex-post benefits (higher absolute forecast accuracy) and costs (lower relative forecast accuracy) to analysts. Finally, it is associated with the informativeness of managers’ answers and affects trading volume, bid-ask spreads, and returns. We conclude that analysts’ strategic information revelation shapes firms’ information environments.

Keywords: financial analysts, conference calls, information revelation, forecast accuracy, incentives

JEL Classification: G24, G29, M41

Suggested Citation

Haag, Julia and Hofmann, Christian and Paulus, Alexander and Schwaiger, Nina and Sellhorn, Thorsten, Analysts' Strategic Information Revelation in Conference Calls (March 2022). TRR 266 Accounting for Transparency Working Paper Series No. 38, Available at SSRN: https://ssrn.com/abstract=3853869 or http://dx.doi.org/10.2139/ssrn.3853869

Julia Haag

LMU Munich School of Management ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Christian Hofmann

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Alexander Paulus (Contact Author)

LMU Munich School of Management ( email )

Ludwigstr. 28 RG IV
Munich, DE 80539
Germany

Nina Schwaiger

LMU Munich ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Thorsten Sellhorn

Ludwig-Maximilians-Universitaet (LMU) Munich ( email )

Ludwigstr. 28 RG IV
Munich, Bavaria 80539
Germany
+49(0)89-21806264 (Phone)
+49(0)89-21806327 (Fax)

HOME PAGE: http://www.rwp.bwl.uni-muenchen.de/personen/professoren/sellhorn/index.html

LMU Munich ( email )

Warburger Straße 100
Paderborn, 33098
Germany
+491705639777 (Phone)

HOME PAGE: http://https://www.en.rwp.bwl.uni-muenchen.de/personen_/professoren/sellhorn/index.html

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