Conference call activity is negatively associated with the level of information asymmetry.

Conference call and information asymmetry. 1999 and Bushee et al. Full text of Conference calls information asymmetry and governance structure See other formats. Disclosure frequency and information asymmetry Review of Quantitative Finance and Accounting Springer vol.

Subjects Subjects Keywords. We find that firms initiating a policy of holding periodic conference calls experience a sustained reduction in information asymmetry although one-time callers experience no significant decline in asymmetry. Cross-sectional and time-series tests show that the level of information asymmetry is negatively associated with conference call activity.

Merton 1987 and Fishman and Hagerty 1989 describe models in which more informative disclosures reduce the costs associated with processing and assimilating public information. This procedure also allows us to avoid a potential confounding effect caused by a temporary increase in information asymmetry caused by the release of information during the conference call. In contract theory and economics information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.

In particular firms that initiate a policy of regularly holding conference calls on average experience a statistically and economically significant 120th reduction in information asymmetry and this reduction is sustained over the long-term. Cross-sectional and time-series tests show that information asymmetry is negatively associated with conference call activity. 2003 find evidence consistent with conference calls leading to a temporary increase in information-based trading during the immediate call period.

Ix 127 leaves. 11 11 Frankel et al. Cross-sectional and time-series tests show that the level of information asymmetry is negatively associated with conference call activity.

Cross-sectional and time-series tests show that the level of information asymmetry is negatively associated with conference call activity. As a result greater disclosure induces more investing by uninformed liquidity traders. Abstract We hypothesize that conference calls are voluntary disclosures that lead to long-term reductions in information asymmetry among equity investors.