An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

William J Mayew
Duke University

Abstract: I investigate whether managers discriminate among analysts during earnings conference calls based on how favorably the analyst views the firm. I find that the probability of an analyst being allowed to participate (i.e. to ask a question) during a conference call is increasing in the analyst’s view of the firm. In particular, the odds of an analyst with a strong buy recommendation participating on a conference call are more than double those of an analyst with a strong sell recommendation. Such differential analyst treatment is more (less) pronounced when managers have higher (lower) incentives to maintain high stock prices, and when analysts are more (less) reliant on management for information. Combined these findings validate prior anecdotal and survey evidence suggesting that managers discriminate among analysts. The results should be informative to lawmakers and the SEC as they deliberate whether to push for legal reform on this issue.

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