Following the introduction of Regulation Fair Disclosure by the SEC in 2000, most of the recent empirical research on the impact of disclosure and dissemination on information asymmetry for investors and companies has come out of the United States. [1] As a result, we were intrigued to hear of a paper recently published by a team of German researchers from Goethe University Frankfurt entitled  “Do Analyst Conferences Provide Informational Benefits? Evidence from Analyst Forecast Properties in a Non-US Forecasting Environment”.

The study is apparently the first to analyse the informational role of analyst conferences in a non-US type forecasting environment. The work examined the impact of conferences / calls with listed German firms on upcoming annual earning forecasts by analysts, specifically looking at the impacton forecast error and forecast dispersion. In Germany, unlike the US following the implementation of Reg FD, most analyst conferences are conducted as “closed calls”, i.e. access is restricted to invited participants only. Interestingly, the research found that these conferences and calls improve analysts' ability to forecast future earnings accurately, suggesting that material information is being released during analyst conferences. 

We spoke earlier with the team, Julian Pachta, Zoltan Novotny-Farkas and Moritz Bassemir, to find out more about their recent work and its possible implications.

Thanks for speaking to Stockopedia. Could you please talk a bit about the background/profile of the research team?

Moritz Bassemir: We are all from Goethe University Frankfurt. Zoltan and I are fourth-year accounting Phd students at the chair of Prof. Günther Gebhardt. Zoltan is also a member of the INTACCT research network. INTACCT is dedicated to accounting and capital markets research at the top international level and is a major collaboration between some of the leading universities in Europe like Lancaster University, HEC Paris and Goethe University Frankfurt. Julian graduated from Goethe University and is currently working for an international investment-banking firm in Frankfurt. Our research interests are mainly concerned with the interaction of firm disclosure and capital markets.

What inspired this research project? Why has European research in this area lagged behind the US? 

Julian Pachta: Analyst conferences and calls are an interesting disclosure event. They differ from other forms of disclosure due to their unscripted, interactive nature which allows analysts to pose open questions to management and to potentially elicit information that is not disclosed otherwise. Over the last…

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