Researchers looked at how managers communicate with financial analysts during earnings conference calls, specifically focusing on the managers’ use of vocal emotions. They found that the vocal emotions of managers are affected by the gender of analysts, and the order of the questions. They also found that female managers and older managers are more likely to display negative vocal emotions than male managers and younger managers. Finally, they found that stock prices respond to managers’ vocal emotions in a timely manner and that analysts incorporate such vocal emotions into near-term earnings forecasts.
The research team used NamSor gender guesser to append gender from personal names. Here is an abstract of the paper and the link to the full document :
Communicating with vocal emotions
University of Birmingham
University of Sheffield
University of St Andrews
Using machine learning techniques, we extract vocal emotions from audio files of earnings conference calls and examine how managers communicate with analysts in question-and-answer (Q&A) sessions. Focusing on these conversations, we find that the vocal emotion of managers (answering questions) is affected by how each question is asked and who asks the question. Managers, who dialogues with a positive emotive analyst or a female analyst, exhibit a more positive vocal response. Our data also provide evidence of distinctive manager-specific vocal communication styles. Female managers and younger managers are more likely to display negative vocal emotions as compared to male and older colleagues. Stock prices respond to managers’ vocal emotions in a timely manner. Analysts also incorporate such vocal emotions into near-term earnings forecasts.
Link to the full paper Communicating with vocal emotions (PDF)
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- Let me hear your voice: Emotional talkers in earnings conference calls
This work examines the link between executives’ voice emotions and financial markets. We find that executives’ vocal emotional intensity measured by changes in vocal pitch contains incremental information beyond the verbal channel. 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 the emotional talking 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.
This blog post used text-davinci-002 for summarization and Dall-E for illustration based on the text “Company earnings conference call with financial analysts and a woman banker in an open space”.
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