To Share or not to Share? Financial Analysts’ Questioning in Conference Calls

Abstract

We study whether superior financial analysts strategically reveal information in earnings conference calls. To the extent that analysts’ relative information advantages translate into desirable professional outcomes, we expect superior analysts to be mindful of safeguarding their information advantages when interacting with peers. Consistently, we find that superior analysts (i.e., analysts with a higher ex-ante relative forecast accuracy) share less information in their questions during conference calls. Hereby, analysts more likely maintain their information advantages. In additional analyses, we underscore the strategic motives of information sharing. We find that analysts ask more (less) informative questions when they are exposed to a higher information uncertainty (competition). Moreover, our analyses indicate that informative questions trigger informative answers, which are not only valuable for the respective analyst but also peer analysts and capital markets. Collectively, our results shed light on the role of analysts as information intermediaries in shaping firms’ information environments.