The Listenability of Disclosures and Firms’ Information Environment

56 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

We introduce a new construct, listenability, defined as the ease with which humans comprehend spoken language, and examine the association between the listenability of corporate vocal disclosures and firms’ information environments. Using a Large Speech Model (LSM) trained on about 680,000 hours of labeled audio data, we analyze audio recordings of 50,280 earnings calls and find that the listenability of managers during conference calls is higher among firms with strong analyst coverage and institutional ownership, but lower when reporting a large earnings surprise. In addition, higher listenability of managers’ presentation is associated with higher-quality interactions with analysts during the Q&A session of the call and higher-quality information production by analysts shortly following the call. Further, higher listenability is associated with stronger price responsiveness in the short window after the call as well as lower bid-ask spreads. These findings suggest clear and effective corporate oral communications facilitate a better information environment.

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

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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