Non-Answers During Conference Calls
Ian D Gow, David F Larcker, Anastasia A Zakolyukina
JOURNAL OF ACCOUNTING RESEARCH | WILEY | Published : 2021
We construct a novel measure of disclosure choice by firms. Our measure is computed using linguistic analysis of conference calls to identify whether a manager's response to an analyst question is a “non-answer.” Using our measure, about 11% of analyst questions elicit non-answers from managers, a rate that is stable over time and similar across industries. A useful feature of our measure is that it enables an examination of disclosure choice within a call. Analyst questions with a negative tone, greater uncertainty, greater complexity, or requests for greater detail are more likely to trigger non-answers. We find performance-related questions tend to be associated with non-answers, and this..View full abstract
Accepted by Luzi Hail. We thank an anonymous reviewer, Gennaro Bernile (discussant), Jonathan Dingel, Alina Lerman (discussant), Christian Leuz, Congcong Li (discussant), Paul Ma, Stanimir Markov (discussant), Maxi Muhn, Doug Skinner, Hal White, and seminar participants at Dartmouth College, INSEAD, the University of Chicago, the University of Minnesota, Penn State University, the University of Queensland, Victoria University of Wellington, the CETAFE conference at USC, the University of Toronto, the Financial Economics and Accounting conference at NYU, the Nick Dopuch Conference at Washington University in St. Louis, and the FARS Midyear meeting for helpful comments. We also thank Robin Weiss, Vincent Pham, Hossein Pourreza, Jingyu Zhang, Sarah Kervin, Cindy Chung, Hande Turkcapar, Maria Kamenetsky, Simon Jacobs, James Gao, Aleschia Hyde, Mariana Lepecki, and Sisi Liu for outstanding research support. We are grateful to Gerard Hoberg and Gordon Phillips for sharing their product-similarity data and to David Dorn and Gordon Hanson for sharing their HS6-to-SIC crosswalk file, code, and trade data. This research was funded in part by the Fama-Miller Center for Research in Finance at the University of Chicago Booth School of Business. Larcker acknowledges support from the Stanford Rock Center for Corporate Governance. Zakolyukina acknowledges financial support from the IBM Corporation Faculty Research Fund, William Ladany Faculty Research Fund, and the University of Chicago Booth School of Business, and research support from the University of Chicago Research Computing Center. An online appendix to this paper can be downloaded at http://research.chicagobooth.edu/arc/journal-of-accounting-research/online-supplements measure is that it enables an examination of disclosure choice within a call. Analyst questions with a negative tone, greater uncertainty, greater complexity, or requests for greater detail are more likely to trigger non-answers. We find performance-related questions tend to be associated with non-answers, and this association is weaker when performance news is favorable. We also find analyst questions about proprietary information are associated with nonanswers, and this association is stronger when firm competition is more intense.