Can the Balanced Scorecard Help in Designing Conference Calls? The Effect of Balanced Information Composition on the Cost of Capital

Sebastian Firk, Jan Christoph Hennig*, Michael Wolff

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    1 Citation (Scopus)
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    Abstract

    Most recent studies on conference calls focus on the costs for firms that can arise from the calls' open nature. We study the benefits of conference calls and hypothesize that firms could use the balanced scorecard concept as a framework for presenting the information (i.e. balanced information composition) in conference calls to lower the cost of capital. Our results show a negative association between a more balanced information composition in conference calls and a firm's cost of capital. Additional tests substantiate that the effect of such a balanced information composition on the cost of capital is driven by a reduction in information asymmetry. Overall, the findings suggest that firms can benefit from the balanced scorecard concept by using it as a framework for preparing their conference calls.

    Original languageEnglish
    Pages (from-to)115-146
    Number of pages32
    JournalEuropean Accounting Review
    Volume29
    Issue number1
    Early online date12-Jan-2020
    DOIs
    Publication statusPublished - 14-Jan-2020

    Keywords

    • Earnings Conference Calls
    • Cost of Capital
    • Balanced Scorecard
    • Textual Analysis
    • VOLUNTARY DISCLOSURE
    • PANEL-DATA
    • ANALYSTS
    • MANAGEMENT
    • SPECIFICATION
    • ILLIQUIDITY
    • ASYMMETRY
    • LIQUIDITY
    • FORECASTS
    • RETURNS

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