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Do Analysts and Their Employers Value Access to Management? Evidence from Earnings Conference Call Participation

Published online by Cambridge University Press:  13 April 2020

Ling Cen Open the ORCID record for Ling Cen [Opens in a new window] ,
Jing Chen ,
Sudipto Dasgupta  and
Vanitha Ragunathan
Ling Cen
Affiliation:
CUHK Business School, Chinese University of Hong Kong ling.cen@cuhk.edu.hk
Jing Chen
Affiliation:
College of Economics and Management, China Agricultural University and Institute of Digital Finance, Peking University jing.chen@cau.edu.cn
Sudipto Dasgupta*
Affiliation:
CUHK Business School, Chinese University of Hong Kong, Lancaster University, and Centre for Economic Policy Research (CEPR)
Vanitha Ragunathan
Affiliation:
UQ Business School, University of Queensland v.ragunathan@business.uq.edu.au
*
s.dasgupta@cuhk.edu.hk (corresponding author)
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Abstract

The literature examining analyst activity assumes that access to management is valued by analysts and their employers. We propose a readily observable measure of access: How often an analyst is invited to be among the first to ask questions in the Q&A session of an earnings conference call. These “early participants” are more successful in the labor market than peers from the same brokerage when their brokerages close. Our results show that access is valued by both sell-side and buy-side employers and reflects connectivity to management as well as analyst skill dimensions not captured in traditional measures of performance.

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Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 56 , Issue 3 , May 2021 , pp. 745 - 787
Copyright
© The Author(s), 2020. Published by Cambridge University Press on behalf of Michael G. Foster School of Business, University of Washington

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Footnotes

We thank an anonymous reviewer, Mark Bradshaw (discussant at ABFER 2016), Jennifer Conrad (the editor), Andrew Ellul, Harrison Hong, Kelvin Law, Kai Li, Yuanshun Li (discussant at NFA 2016), John Lyon, Vikram Nanda, Han Xia, Frank Yu, Harold Zhang, Dexin Zhou (discussant at CFEA 2016), and seminar participants at the Chinese University of Hong Kong, Hong Kong Baptist University, Iowa State University, Korea Advanced Institute of Science and Technology (KAIST), Lingnan University, Peking University, and University of Texas at Dallas, and participants at the 2016 Conference on Financial Economics and Accounting (CFEA), 2016 Asian Bureau of Finance and Economic Research Annual Conference (ABFER), 2016 Chinese International Conference of Finance (CICF), and 2016 Northern Finance Association Annual Meeting (NFA) for their comments and suggestions. This paper was previously circulated under the title “It’s Showtime! Conference Call Participation and Analyst Career Outcomes.” All errors are the authors’ own. Cen acknowledges financial support from the Social Sciences and Humanities Research Council of Canada (SSHRC) and CUHK.

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