Conference Calls,Investor Sentiment And Market Response

The development of the capital market has provided an important communication channel for both the supply and demand sides of funds,and has played an important role in improving the efficiency of resource allocation.However,information asymmetry,as one of the important reasons for market failure,has been plaguing supervision department and companies,including their internal and external stakeholders.Therefore,it should be highly valued in terms of both system designing and follow-up supervision.Listed companies generally have large scales,lots of shareholders and creditors,and their rights and interests are also different.Therefore,serious information asymmetry questions are prone to generate.In order to reduce information asymmetry,protect investors,and ensure the smooth operation of the capital market,relevant departments have issued a series of policies,regulations and some other measures to guide and require listed companies to disclose information,such as annual reports,interim reports,quarterly reports and major event reports(such as M&A).With the gradual maturity of various market players,listed companies are no longer limited to the way of mandatory disclosure in order to maintain the company’s good image and the stability of the stock price.In fact,voluntary disclosure has become a more important choice.For example,in the United States,conference calls have long been an important form of corporate information disclosure.With the rapid development of China’s capital market and information technology,domestic listed companies are increasingly choosing network roadshow platforms to interact with investors.Wind 3C is one of the most important roadshow platforms.Foreign studies have found that information exists in conference calls,including both the content of texts and the information outside that.Conference calls are generally divided into two parts(one is statement part which is presented by the executive,and the other is the interaction between the executive and investors).It has been proved that the second part contains a larger amount of information than the first one.Compared to textual materials,conference calls are presented in audio,which inevitably include executive language features that are difficult to present in texts.Language,expressions and movements often convey information outside the characters considering the characteristics of human communication.Therefore,there must be information that IR roadshow conference calls of Chinese listed companies beyond the characters,especially when considering China’s "high context"communication habits.In terms of soft information in conference calls,domestic research is still in its infancy,but it has been proved that soft information can have an impact on the market.So,what is the reaction path from the disclosure of information in conference calls to the reaction of market?This paper uses Wind 3C IR roadshow conference calls as the research source with the method of experimental economics and tries to analyze the path of how investor relationship conference calls affect a company’s market performance.Existing research has found that conference calls can influence the market by affecting investors’sentiment.According to the depth of the information,this paper believes that conference calls can affect the market through two channels.One is the surface attributes,including the nature of the key disclosure events(regular meetings or special events)and the executive’ gender of the speeches(female exists or not).The other is the deep attributes,including the level of enthusiasm and comprehensiveness of executives when answering questions.The influence of surface information is indirect,because it affects the market by stimulating investors’emotional rationality(the behavior of information search).Special events and statements by female executives will trigger investors’ rational emotions and ultimately inhibit the positive reaction of the market.However,in terms of the comparison of a trading day before the meeting and the day of the meeting,the impact of different natures on the amount of excess search is completely the opposite.This may be due to investors’ different search habits for events of different natures.The impact of deep information is relatively straightforward,and directly affects emotions,which in turn have a positive impact on the market.