Does Silence Speak? An Empirical Analysis of Disclosure Choices During Conference Calls


  • We thank Mariette Hooplot, Sjalina Meewisse, and Joost Somers for their valuable research assistance. We gratefully acknowledge the comments from Christof Beuselinck, Jan Bouwens, Holger Daske, Ron Dye, Mirko Heinle, Markus Hitz, Frank Hodge, Christian Hofmann, Philip Joos, Dawn Matsumoto, Shivaram Rajgopal, Richard Sansing, Terry Shevlin, Jeroen Suijs, Laurence van Lent, Mohan Venkatachalam (discussant), and workshop participants at University of Mannheim, the AAA 2009 Financial Accounting and Reporting Section (FARS) Midyear Meeting in New Orleans, Tilburg University, and University of Washington. Special thanks go to Abbie Smith (the editor) and Russell Lundholm (the referee) for their suggestions to improve the paper. The authors thank Penelope Cray for her editorial assistance. Part of this research was completed while the first author was visiting the Sloan School of Management, MIT.


In this paper, we exploit the open nature of conference calls to explore whether managers withhold information from the investing public. Our evidence suggests that managers regularly leave participants on the conference call in the dark by not answering their questions. We find that the best predictors of such an event are firm size, a CEO's stock price–based incentives, company age, firm performance, litigation risk, and whether analysts are actively involved during the call's Q&A section. Finally, we document strong support for the assumption maintained in the literature that investors interpret silence negatively. That is, investors seem to interpret no news as bad news.