The Role of Analyst Conference Calls in Capital Markets

189 Pages·2009·1.74 MB·English

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The Role of Analyst Conference Calls
in Capital Markets

The Role of Analyst Conference Calls
in Capital Markets
Derolvanconferencecallsmetanalisten
inkapitaalmarkten
PROEFSCHRIFT
terverkrijgingvandegraadvandoctor
aandeErasmusUniversiteitRotterdam
opgezagvandeRectorMagnificus
Prof.dr.H.G.Schmidt
envolgensbesluitvanhetCollegevoorPromoties.
Deopenbareverdedigingzalplaatsvindenop
27januari2010om13.30uur
door
ErikMichelRoelofsen
geborente’s-Gravenhage
Promotoren:
Prof.dr.G.M.H.Mertens
Prof.dr.L.G.vanderTasRA
OverigeLeden:
Prof.dr.M.N.HoogendoornRA
Prof.dr.C.B.M.vanRiel
Prof.dr.P.G.J.Roosenboom
ErasmusResearchInstituteofManagement–ERIM
RotterdamSchoolofManagement(RSM)
ErasmusSchoolofEconomics(ESE)
ErasmusUniversityRotterdam
Internet:http://www.erim.eur.nl
ERIMElectronicSeriesPortal: http://hdl.handle.net/1765/1
ERIMPhDSeriesinResearchinManagement,190
ReferencenumberERIM:EPS-2009-F&A
ISBN978-90-5892-228-1
©2010, ErikRoelofsen
Design:B&TOntwerpenadvieswww.b-en-t.nl
Print:Havekawww.haveka.nl
All rights reserved. No part of this publication may be reproduced or transmitted in any
form or by any means electronic or mechanical, including photocopying, recording, or by
any information storage and retrieval system, without permission in writing from the
author.
©2010,ErikRoelofsen

Contents
Preface.................................................................................................................................xi
1 Introduction.............................................................................................................1
1.1 Theuseofanalystcalls..............................................................................................1
1.2 Subjectofthisresearch..............................................................................................4
2 Whatmakesconferencecallsuseful?....................................................................7
2.1 Introduction...............................................................................................................7
2.2 Priorliteratureandhypothesisdevelopment..........................................................11
2.2.1 Managementdisclosuresduringthepresentationanddiscussionperiodlength.11
2.2.2 Contentofthepresentationanddiscussionperiodlength...................................14
2.3 Dataandvariablemeasurement.............................................................................15
2.3.1 Sampleselection..................................................................................................15
2.3.2 Dependentvariables............................................................................................21
2.4 Relationbetweenpresentationanddiscussionperiodlengths................................31
2.4.1 Measuringabnormalpresentationlength............................................................31
2.4.2 Theeffectofabnormalpresentationlengthondiscussionlength.......................40
2.4.3 Therelationbetweenlengthandinformation......................................................43
2.5 Relationbetweenpresentationcontentanddiscussionperiodlength....................52
2.5.1 Measuringabnormalfinancialandforward-lookingdisclosures........................52
2.6 The effect of abnormal financial and forward-looking disclosures on discussion
length 55
2.7 Conclusions.............................................................................................................59
3 Disclosureofintangibleassetinformationinconferencecalls..........................61
3.1 Introduction.............................................................................................................61
3.2 Earningsconferencecalls.......................................................................................63
3.3 IntangibleAssets......................................................................................................65
3.4 Hypothesesdevelopment..........................................................................................67
3.5 Methodology............................................................................................................69
3.5.1 Sampleselection..................................................................................................69
3.5.2 Variables..............................................................................................................73
3.5.2.1 Dependentvariables................................................................................73
3.5.2.2 Independentvariables..............................................................................74
3.5.2.3 Controlvariables......................................................................................82
3.6 Empiricaltests.........................................................................................................83
3.6.1 Informationcontentofintangibleassetdisclosures............................................83
3.6.2 Aredisclosures“sticky”?.....................................................................................87
3.6.3 Domanagerslearnfromthediscussionportion?................................................91
3.7 Discussionandconclusions.....................................................................................94
4 Doanalystsvoicetheirtruebeliefsinconferencecalls?....................................97
4.1 Introduction.............................................................................................................97
4.2 Priorresearchandhypothesisdevelopment...........................................................99
4.3 Dataandvariablemeasurement...........................................................................102
4.3.1 Sampleselection................................................................................................102
4.3.2 Dependentvariables..........................................................................................105
4.3.2.1 Optimismmeasure.................................................................................105
4.3.2.2 Returnduringthediscussion.................................................................111
4.3.3 Explanatoryvariables........................................................................................111
4.3.4 Controlvariables................................................................................................113
4.4 Empiricaltests.......................................................................................................116
4.4.1 Isanalystoptimisminformative?......................................................................116
4.4.2 Effectofbadnewsonreflectionofanalysts’truebeliefs.................................117
4.4.3 Effectofinstitutionalholdings..........................................................................121
4.5 Conclusions...........................................................................................................124
5 Conclusion............................................................................................................127
References.........................................................................................................................131
Summary..........................................................................................................................139
Samenvatting....................................................................................................................143