Rapport-Building Effects of Linguistic Mirroring by Analysts: Evidence from Earnings Conference Calls

64 Pages Posted: 26 Jul 2024

See all articles by Kathryn Brightbill

Kathryn Brightbill

Utah State University - School of Accountancy

R. Christopher Small

University of Houston - C.T. Bauer College of Business

Jane Z. Song

University of Missouri - Trulaske College of Business

Date Written: March 29, 2024

Abstract

Linguistic mirroring describes the imitation of the linguistic attributes of another person, including their words, phrases, and style. Prior literature finds that linguistic mirroring increases rapport with and the responsiveness of conversational partners. Using novel, question-specific measures of mirroring, we explore how analysts’ linguistic mirroring of managers during conference calls affects managerial responsiveness, as well as analysts’ future access to management and career outcomes. First, we find evidence that analysts engage in mirroring in the presence of career and information-gathering incentives. Second, we find that stylistic mirroring elicits lengthier, more conversational responses from managers, while lexical mirroring elicits more concise, analytical, and numeric responses. Third, consistent with the positive rapport- and reputation-building effects of mirroring, analysts engaging in more mirroring of any form issue more accurate firm-specific forecasts, are called upon earlier in subsequent conference calls, and are more likely to be named an All-Star in the following period. Finally, we find evidence consistent with mirroring conveying informational benefits to capital market participants. Our results suggest that linguistic mirroring is an important mechanism through which analysts can develop rapport with managers and enhance their reputation, benefiting themselves and the firm’s information environment.

Keywords: Linguistic mirroring, LSM, Jaccard, analysts, conference calls, rapport, information environment

JEL Classification: G14, G24, G41, M41

Suggested Citation

Brightbill, Kathryn and Small, R. Christopher and Song, Jane (Zhiyan), Rapport-Building Effects of Linguistic Mirroring by Analysts: Evidence from Earnings Conference Calls (March 29, 2024). Available at SSRN: https://ssrn.com/abstract=4006391 or http://dx.doi.org/10.2139/ssrn.4006391

Kathryn Brightbill

Utah State University - School of Accountancy ( email )

Logan, UT 84322
United States

R. Christopher Small (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

4750 Calhoun Road
Houston, TX 77204
United States

Jane (Zhiyan) Song

University of Missouri - Trulaske College of Business ( email )

School of Accountancy
Trulaske College of Business
Columbia, MO 65211
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
201
Abstract Views
705
Rank
289,531
PlumX Metrics