Voluntary disclosure to influence investor reactions to merger announcements: An examination of conference calls

Accounting Review

Volumn 86, Issue 2, 2011, Pages 637-667

  Kimbrough, Michael D ^a   Louis, Henoch ^b  

^a UNIVERSITY OF MARYLAND   (United States)

^b PENNSYLVANIA STATE UNIVERSITY   (United States)

Author keywords

Conference calls; Mergers; Voluntary disclosure

Indexed keywords

EID: 79955623064     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.00000022     Document Type: Article

References (67)

1. Ahearne, A., W Griever, and F. Warnock. 2004. Information costs and home bias: an analysis of U.S. holdings of foreign securities. Journal of International Economics 62 (2): 313-336. (Pubitemid 38256924)
2. Asquith, P., R. Bruner, and D. Mullins, Jr. 1983. The gains to bidding firms from mergers. Journal of Financial Economics 11 (1-4): 121-139.
3. Barber, R., and J. Lyon. 1997. Detecting long-run abnormal stock returns: the empirical power and specifications of test statistics. Journal of Financial Economics 43 (3): 341-372. (Pubitemid 127167992)
4. Baginski, S., and J. Hassell. 1997. Determinants of management forecast precision. The Accounting Review 72 (2): 302-312.
5. Bowen, R., A. Davis, and D. Matsumoto. 2002. Do conference calls affect analysts' forecasts? The Accounting Review 11 (2): 285-316.
6. Bradshaw, M., B. Bushee, and G. Miller. 2004. Accounting choice, home bias, and U.S. investment in non-U.S. firms. Journal of Accounting Research 42 (5): 795-841. (Pubitemid 39594060)
7. Brockman, P., and X. Martin. 2009. Voluntary disclosures around acquisitions. Working paper, University of Missouri, and Washington University in St. Louis.
8. Chang, S. 1998. Takeovers of privately held targets, method of payment, and bidder returns. The Journal of Finance 53 (2): 773-784.
9. Chung, K., R. Jacob, and Y. Tang. 2003. Earnings management by firms announcing earnings after SEC filing. International Advances in Economic Research 9 (2): 152-162.
10. Covrig, V., S. Lau, and L. Ng. 2006. Do domestic and foreign fund managers have similar preferences for stock characteristics? A cross-country analysis. Journal of International Business Studies 37 (3): 407-429. (Pubitemid 43848899)
11. Cready, W., and P. Mynatt. 1991. The information content of annual reports: A price and trading response analysis. The Accounting Review 66 (2): 291-312.
12. Dye, R. 1985. Disclosure of nonproprietary information. Journal of Accounting Research 23 (1): 123-145.
13. Easton, P., and M. Zmijewski. 1993. SEC Form 10 K/10Q reports and annual reports to shareholders: Reporting lags and squared market model prediction errors. Journal of Accounting Research 31 (1): 113-129.
14. Erickson, M., and S. Wang. 1999. Earnings management by acquiring firms in stock for stock mergers. Journal of Accounting and Economics 27 (2): 149-176.
15. Fischer, P., and H. Louis. 2008. Financial reporting and conflicting managerial incentives: The case of management buyouts. Management Science 54 (10): 1700-1714.
16. Foster, T., D. Jenkins, and D. Vickery. 1983. Additional evidence on the incremental information content of the 10-K. Journal of Business Finance & Accounting 10 (1): 57-66.
17. Francis, J., D. Philbrick, and K. Schipper. 1994. Shareholder litigation and corporate disclosures. Journal of Accounting Research 32 (2): 137-164.
18. Francis, J., K. Schipper, and L. Vincent. 2002. Expanded disclosures and the increased usefulness of earnings announcements. The Accounting Review 11 (3): 515-546.
19. Frankel, R., M. Johnson, and D. Skinner. 1999. An empirical examination of conference calls as a voluntary disclosure medium. Journal of Accounting Research 37 (1): 133-150.
20. Fried, D., and A. Schiff. 1981. CPA switches and associated market reactions. The Accounting Review 56 (2): 326-331.
21. Fuller, K., J. Netter, and M. Stegemoller. 2002. What do returns to acquiring firms tell us? Evidence from firms that make many acquisitions. The Journal of Finance 57: 1763-1793. (Pubitemid 36932122)
22. Gong, G., H. Louis, and A. Sun. 2008a. Earnings management, lawsuits, and stock-for-stock acquirers' market performance. Journal of Accounting and Economics 46 (1): 62-77.
23. -, -, and -, 2008b. Earnings management and firm performance following open-market repurchases. The Journal of Finance 63 (2): 947-986.
24. Griffin, P. 2003. Got information? Investor response to Form 10-K and Form 10-Q EDGAR filings. Review of Accounting Studies 8 (4): 433-460. (Pubitemid 39046449)
25. Heckman, J. 1979. Sample selection bias as a specification error. Econometrica 47 (1): 153-161.
26. Hollie, D., J. Livnat, and B. Segal. 2005. Oops, our earnings were indeed preliminary: When preliminary earnings announcements and subsequent filings disagree. Journal of Portfolio Management 31 (2): 94-104.
27. Hutton, A., G. Miller, and D. Skinner. 2003. The role of supplementary statements with management earnings forecasts. Journal of Accounting Research 41 (5): 867-890. (Pubitemid 37527943)
28. Jo, H., and Y. Kim. 2007. Disclosure frequency and earnings management. Journal of Financial Economics 84 (2): 561-590.
29. Johnson, W., and T. Lys. 1990. The market for audit services: Evidence from voluntary auditor changes. Journal of Accounting and Economics 12 (1-3): 281-308.
30. Jones, J. 1991. Earnings management during import relief investigations. Journal of Accounting Research 29 (2): 193-228.
31. Jung, W., and Y. Kwon. 1988. Disclosure when the market is unsure of information endowment of managers. Journal of Accounting Research 26 (1): 146-153.
32. Kang, J., and R. Stulz. 1997. Why is there a home bias? An analysis of foreign portfolio equity ownership in Japan. Journal of Financial Economics 46: 3-28. (Pubitemid 127163074)
33. Kasznik, R., and B. Lev. 1995. To warn or not to warn: Management disclosures in the face of an earnings surprise. The Accounting Review 70 (1): 113-134.
34. Kimbrough, M. 2005. The effect of conference calls on analyst and market underreaction to earnings announcements. The Accounting Review 80 (1): 189-219. (Pubitemid 40251562)
35. Klock, M. 1994. The stock market reaction to a change in certifying auditor. Journal of Accounting, Auditing & Finance 9 (2): 339-347.
36. Kothari, S., A. Leone, and C. Wasley. 2005. Performance matched discretionary accruals. Journal of Accounting and Economics 39 (1): 163-197.
37. -, and J. Warner. 1997. Measuring long-horizon security price performance. Journal of Financial Economics 43 (3): 301-339. (Pubitemid 127167991)
38. Lang, L., R. Stulz, and R. Walkling. 1989. Managerial performance, Tobin's q and the gain from successful tender offers. Journal of Financial Economics 24 (1): 137-154.
39. Lang, M., and R. Lundholm. 2000. Voluntary disclosure and equity offerings: Reducing information asymmetry or hyping the stock? Contemporary Accounting Research 17 (4): 623-662.
40. Larcker, D., and T. Rusticus. 2010. On the use of instrumental variables in accounting research. Journal of Accounting and Economics 49 (3): 186-205.
41. Leone, A., S. Rock, and M. Willenborg. 2007. Disclosure of intended use of IPO proceeds and underpricing in initial public offerings. Journal of Accounting Research 45 (1): 111-153.
42. Li, E., and K. Ramesh. 2009. Market reaction surrounding the filing of periodic SEC reports. The Accounting Review 84 (4): 1171-1208.
43. Lipin, S., and M. Sirower. 2003. Investor communications: A message of confidence in the deal. Mergers and Acquisitions 38 (10): 21-26.
44. Loderer, C., and K. Martin. 1997. Executive stock ownership and performance: Tracking faint traces. Journal of Financial Economics 45: 223-255.
45. Louis, H. 2004. Earnings management and the market performance of acquiring firms. Journal of Financial Economics 74 (1): 121-148. (Pubitemid 39593830)
46. -, D. Robinson, and A. Sbaraglia. 2008. An integrated analysis of the association between accrual disclosure and the abnormal accrual anomaly. Review of Accounting Studies 13 (1): 23-54.
47. -, and H. White. 2007. Do managers intentionally use repurchase tender offers to signal private information? Evidence from firm financial reporting behavior. Journal of Financial Economics 85 (1): 205-233.
48. Malmendier, U., and G. Tate. 2008. Who makes acquisitions: CEO overconfidence and the market's reaction. Journal of Financial Economics 89 (1): 20-43.
49. Maquieira, C., W Megginson, and L. Nail. 1998. Wealth creation versus wealth redistributions in pure stock-for-stock mergers. Journal of Financial Economics 48 (1): 3-33. (Pubitemid 128339102)
50. Matsumoto, D., M. Pronk, and E. Roelofson. 2006. Managerial disclosure vs. analyst inquiry: An empirical investigation of the presentation and discussion portions of earnings-related conference calls. Working paper, University of Washington, and Erasmus University Rotterdam.
51. Mayew, W., and M. Venkatachalam. 2009. The power of voice: Managerial affective states and future firm performance. Working paper, Duke University.
52. Moeller, S., F. Schlingemann, and R. Stulz. 2005. Wealth destruction on a massive scale? A study of acquiring-firm returns in the recent merger wave. The Journal of Finance 60 (2): 757-782. (Pubitemid 40465843)
53. -, -, and -, 2007. How do diversity of opinion and information asymmetry affect acquirer returns? Review of Financial Studies 20 (6): 2047-2078.
54. Moore, W., E. Rimland, H. Ritch, and J. Rouner. 1998. On the acquisition fast-track to growth and value. Mergers and Acquisitions 32 (4): 10-17.
55. Morck, R., A. Shleifer, and R. Vishny. 1990. Do managerial objectives drive bad acquisitions? The Journal of Finance 45: 31-48.
56. Pastena, V. 1979. Some evidence on the SEC's system of continuous disclosure. The Accounting Review 54 (4): 776-783.
57. Schwartz, K., and B. Soo. 1995. An analysis of Form 8-K disclosures of auditor changes by firms approaching bankruptcy. Auditing: A Journal of Practice & Theory 14 (1): 125-136.
58. Securities and Exchange Commission (SEC). 2000. Final rule: Selective disclosure and insider trading. Available at http://www.sec.gov/rules/final/33- 7881.htm.
59. Servaes, H. 1991. Tobin's Q and the gains from takeovers. The Journal of Finance 46: 409-419.
60. Shleifer, A., and R. Vishny. 2003. Stock market driven acquisitions. Journal of Financial Economics 70 (3): 295-311. Skinner, D. 1997. Earnings disclosure and stockholder lawsuits. Journal of Accounting and Economics 23 (3): 249-282.
61. Stice, E. 1991. The market reaction to 10-K and 10-Q filings and to subsequent The Wall Street Journal earnings announcements. The Accounting Review 66 (1): 42-55.
62. Suh, J. 2001. Home bias among institutional investors: A study of The Economist quarterly portfolio poll. Working paper, SK Economic Research Institute.
63. Tasker, S. 1998. Bridging the information gap: Quarterly conference calls as a medium for disclosure. Review of Accounting Studies 3 (1-2): 137-167.
64. Travlos, N. 1987. Corporate takeover bids, method of payment, and bidding firms' stock returns. The Journal of Finance 42 (4): 943-963.
65. Tucker, J. 2007. Is openness penalized? Stock returns around earnings warnings. The Accounting Review 82 (4): 1055-1087.
66. Wooldridge, J. 2002. Econometric Analysis of Cross-Section and Panel Data. Cambridge, MA: The MIT Press.
67. -, 2008. Estimation of the average treatment effect in the correlated random coefficient model. In Advances in Econometrics Vol. 21, Modeling and Evaluating Treatment Effects In Econometrics, edited by D. Millimet, J. Smith, and E. Vytlačil, 93-117. Amsterdam, The Netherlands: Elsevier.