“Buy-Side Analysts and Earnings Conference Calls” by Dr. Michael JUNG
Dr. Michael JUNG
Assistant Professor of Accounting
Leonard N. Stern School of Business
New York University
Companies’ earnings conference calls are perceived to be venues for sell-side equity analysts to ask management questions. In this study, we examine another important conference call participant—the buy-side analyst—that has been underexplored in the literature due to data limitations. Using a large sample of transcripts, we identify 3,869 buy-side analysts from 708 institutional investment firms that participated (i.e., asked a question) on 13,411 conference calls to examine the determinants and implications of their participation. Buy-side analysts are more likely to participate when sell-side analyst coverage is low and dispersion in sell-side earnings forecasts is high, consistent with buy-side analysts directly acquiring information when a company’s information environment is poor. Institutional investors trade more of a company’s stock in the quarters in which their buy-side analysts participate on the call. Finally, we find evidence that buy-side analyst participation is associated with company-level changes in trading volume, institutional ownership, and short interest.