The Listenability of Disclosures and Firms’ Information Environment

55 Pages Posted: 30 Nov 2023

See all articles by Andrew C. Call

Andrew C. Call

Marshall School of Business - University of Southern California

Ben Wang

The Hong Kong Polytechnic University

Liwei Weng

Northeastern University - Accounting Group

Qiang Wu

Hong Kong Polytechnic University - School of Accounting and Finance; Hong Kong Polytechnic University - Faculty of Business

Date Written: November 15, 2023

Abstract

This paper examines how the listenability of corporate vocal disclosures affects firms’ information environment. Listenability refers to the ease with which humans can comprehend spoken language. We introduce a new measure of listenability by analyzing audio recordings of 56,989 quarterly earnings calls using an advanced, supervised machine learning model trained on 680,000 hours of labeled audio data. We find that enhanced listenability of the presentation portion of earnings conference calls is associated with higher quality manager-analyst interactions during the Q&A session of the call and better information production by analysts after the call. Further analyses reveal that higher listenability is associated with stronger price responsiveness, higher stock price informativeness, faster price formation, and lower bid-ask spread following the call. These results are consistent with clear and effective corporate oral communications facilitating a better information environment.

Keywords: listenability, vocal disclosure, analyst forecast, information environment

JEL Classification: G14, G18, M41

Suggested Citation

Call, Andrew C. and Wang, Ben and Weng, Liwei and Wu, Qiang, The Listenability of Disclosures and Firms’ Information Environment (November 15, 2023). Available at SSRN: https://ssrn.com/abstract=4634029 or http://dx.doi.org/10.2139/ssrn.4634029

Andrew C. Call

Marshall School of Business - University of Southern California ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Ben Wang

The Hong Kong Polytechnic University ( email )

School of Accounting and Finance
M740, Li Ka Shing Tower
Hong Kong
China

Liwei Weng (Contact Author)

Northeastern University - Accounting Group ( email )

360 Huntington Ave.
Boston, MA 02115
United States

Qiang Wu

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

Hung Hom
Kowloon
Hong Kong
5182095596 (Phone)

Hong Kong Polytechnic University - Faculty of Business ( email )

9/F, Li Ka Shing Tower
The Hong Kong Polytechnic University
Hong Kong, Hung Hom, Kowloon M923
China

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