Author ORCID Identifier
Year of Publication
Doctor of Philosophy (PhD)
Business and Economics
Dr. Hong Xie
Changes to the language and construction of financial reports are indicative of firms’ future returns and operations. Investors, however, are often inattentive to these changes; consequently, price reactions to these changes are delayed—resulting in “lazy” prices. This study explores two possible channels through which earnings conference calls may mitigate lazy prices: (1) the topic overlap channel and (2) the comparison language channel. Specifically, I examine whether the topic overlap between conference call transcripts and 10K/10Q filings or the comparison language used on earnings conference call transcripts helps investors understand the nature of the overlapped topics and triggers investors’ attention to firms’ financial reports and changes therein, and thus attenuates the predictive ability of changes in textual narratives for future returns. The main results support both channels. Further analysis shows that the comparison language in both the Q&A session and the Presentation session of earnings conference calls helps mitigate lazy prices. This study contributes to both the earnings conference call literature and the capital market literature by providing new insights into the role of earnings conference calls in the capital markets and contributes to textual analysis literature by providing best practices of applying topic modeling methods to accounting research.
Digital Object Identifier (DOI)
Zhang, Chuancai, "Earnings Conference Calls and Lazy Prices" (2021). Theses and Dissertations--Accountancy. 15.