Controlling the narrative: managers’ topic-shifting behavior in conference calls

Abstract This study implements topical analysis to identify the extent to which managers shift their responses from analysts’ questions in earnings conference calls. We refer to this behavior as managerial topic-shifting. Using a sample of conference calls from 2002 to 2017, we find that managers in firms with better performance, more powerful CEOs, and a weaker information environment shift more from the topics of analysts’ inquiries. Managers are also more likely to shift topics when analysts’ questions display a more positive tone or lower specificity. Moreover, we find that managerial topic-shifting provides incremental information to capital markets by facilitating the incorporation of earnings information into stock prices. Our study documents a previously unexplored dimension of managerial disclosure strategy.