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Why Do Managers Interact with Unfavorable Analysts during Earnings Calls?:

Thesis advisor: Mark Bradshaw / Managers prioritize questions from favorable analysts during earnings announcement conference calls, reinforcing analysts’ incentives to be optimistic. However, managers also interact with unfavorable analysts on calls, and, when they do, absolute announcement returns are larger. I seek to understand why managers interact with unfavorable analysts. I find that unfavorable analysts attenuate their negative views after these interactions with managers. Additionally, the stock price response is stronger for forecasts from managers who regularly interact with unfavorable analysts, consistent with enhanced credibility of these managers. Finally, I use peer firm restatement announcements as exogenous shocks to investors’ assessment of a firm’s accounting quality, and I find that nonrestating firms with managers who regularly interact with unfavorable analysts experience attenuated negative returns, relative to other nonrestating peers. Overall my findings are consistent with managers’ interactions with unfavorable analysts providing significant benefits to the firm, such as resolving analysts’ concerns and increasing managers’ credibility. / Thesis (PhD) — Boston College, 2023. / Submitted to: Boston College. Carroll School of Management. / Discipline: Accounting.

Identiferoai:union.ndltd.org:BOSTON/oai:dlib.bc.edu:bc-ir_109782
Date January 2023
CreatorsFlake, Jared
PublisherBoston College
Source SetsBoston College
LanguageEnglish
Detected LanguageEnglish
TypeText, thesis
Formatelectronic, application/pdf
RightsCopyright is held by the author.

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