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

Sebastian Firk, Jan C. Hennig and Michael Wolff

European Accounting Review, 2020, vol. 29, issue 1, 115-146

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.

Date: 2020
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DOI: 10.1080/09638180.2019.1709523

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