Managerial Reaction to Analysts’ Limited Attention: Evidence From Overlapping Conference Calls

We use a setting of overlapping conference calls, which is when multiple calls occur at the same time for firms covered by the same analyst, to examine analysts’ limited attention on managers’ voluntary disclosure choices. We first confirm that analysts have a lower participation rate during overlapping calls. We find no clear evidence that managers attempt to reduce call overlap. The most important factors associated with overlapping calls, such as the headquarters’ time zone, suggest that overlapping calls are mostly predetermined. We find overlapping calls are positively related to the issuance and discussion of guidance, forward-looking statements, and the use of more neutral and direct language. These results are consistent with managers offsetting analysts’ attention scarcity by increasing the quantity and quality of disclosures. We further document that overlapping calls are associated with negative market consequences and the increased disclosures associated with overlapping calls can attenuate these negative market consequences.