Ethnic Minority Analysts’ Participation in Public Earnings Conference Calls
Journal of Accounting Research 61 (5): 1591–1631.
Coauthored with Jeremiah Green, Josh Lee, and Nate Sharp
Abstract: We investigate ethnic minority and nonminority sell-side analysts’ participation in public earnings conference calls. We find that minority analysts are underrepresented in conference call Q&A sessions, and minority analysts who do participate on the calls experience lower levels of prioritization than do nonminority analysts. Minority analysts’ lower participation rates are partially but not fully mediated by characteristics such as experience, work environment, and stock rating favorability. Additionally, firm and conference call fixed effects mediate approximately half the magnitude of lower minority participation rates. Extroverted minority analysts participate at higher rates, but the negative association between minority status and conference call participation is exacerbated when calls are more time constrained, when executive teams are less diverse, and when analysts are from less prestigious brokerage houses. Overall, we document the underrepresentation of minority analysts on earnings conference calls and provide evidence suggesting both analysts’ and managers’ choices influence minority analysts’ participation rates.
2020 UT Salem Center for Policy Ph.D. Student Symposium (Flam)
Analysts’ and Managers’ Use of Humor on Public Earnings Conference Calls
Review of Accounting Studies, forthcoming
Coauthored with Andy Call, Josh Lee, and Nate Sharp
Abstract: Despite the prevalence and importance of humor in interpersonal communication, the disclosure literature is silent on the use of humor in the context of corporate communication. Using a sophisticated machine learning algorithm, we identify managers’ successful uses of humor during public earnings conference calls. When managers use humor on an earnings call, stock market returns and analyst forecast revisions following the call are more positive, primarily because of a muted response to negative earnings news. Consistent with managers’ successful use of humor being a favorable signal of future firm performance, we find no evidence of a return reversal over the subsequent quarter, and managers’ use of humor predicts more favorable news at the subsequent quarter’s earnings announcement. Our study provides new evidence on the use of humor in corporate disclosure events, and our findings indicate that humor can have a meaningful influence on the market response to public earnings conference calls.
2019 AAA Annual Meeting (Flam), University of Kentucky (Sharp), Kent State University (Sharp), Nanyang Technological University (Sharp), National University of Singapore (Sharp), University of Adelaide (Sharp), Utah State University (Sharp)
Spillover Effects in Disclosure-Related Securities Litigation
The Accounting Review 97 (5): 275–299
Coauthored with Dain Donelson and Chris Yust
Abstract: Securities litigation is relatively rare but can significantly affect sued firms. We extend this research by examining the spillover effect of securities litigation on industry peers using a sample of disclosure-related litigation—distinct from events such as restatements and SEC enforcement. We find investors respond immediately as peers exhibit negative abnormal returns before and after case filings. Additionally, peers provide more voluntary earnings and sales forecasts. Notably, investors and peers respond primarily to cases that eventually settle, where litigation costs are concentrated. Further, disclosure results are concentrated in growth firms, where voluntary disclosure is most important, and in low litigation industries, where litigation is more noteworthy. Peers also adjust attributes of mandatory disclosures: disclosures become shorter, more readable, and contain fewer litigation-related terms. These changes appear successful as peers have lower future litigation incidence. Collectively, our findings indicate securities litigation has significant effects beyond the firms that directly face litigation.
2020 AAA Annual Meeting (Flam), Florida International University (Donelson), Texas A&M University (Flam)