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Let me hear your voice: Emotional talkers in earnings conference calls

Author

Listed:
  • Elena Loutskina

    (University of Virginia)

  • Oleksandr Talavera

    (University of Birmingham)

  • Shuxing Yin

    (University of Sheffield)

  • Mao Zhang

    (University of St Andrews)

Abstract

This work examines the link between executives' vocal expressions and financial markets. We find that executives' emotional intensity, measured by changes in vocal pitch, contains incremental information beyond the verbal channel. A heightened vocal pitch displayed by executives during earnings conference calls is associated with positive abnormal stock returns, optimistic earnings forecasts, and high forecast quality. In addition to the informational role, we also find that a communication style with a higher-pitched voice dramatically improves the value of executives in the managerial labour market. This study provides new evidence that the way how executives communicate information matters to the market.

Suggested Citation

  • Elena Loutskina & Oleksandr Talavera & Shuxing Yin & Mao Zhang, 2022. "Let me hear your voice: Emotional talkers in earnings conference calls," Discussion Papers 22-10, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:22-10
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    File URL: https://repec.cal.bham.ac.uk/pdf/22-10.pdf
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    More about this item

    Keywords

    conference calls; vocal pitch; emotional intensity; soft information; market reaction; managerial capabilities;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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