Number of numbers: Does a greater proportion of quantitative textual disclosure reduce information risk?

John L. Campbell, Xin Zheng and Dexin Zhou

Journal of Corporate Finance, 2025, vol. 94, issue C

Abstract: This study investigates the association between quantitative disclosure and information risk, hypothesizing that a greater proportion of numerical information in earnings conference calls decreases information risk and thus increases firm value. We find that, even after controlling for earnings information, more extensive numerical disclosure correlates positively with earnings announcement returns. This effect concentrates in firms with poorer information environments and during periods of heightened performance uncertainty. Finally, we show that a greater proportion of numerical disclosure reduces implied volatility, bid-ask spread, and implied cost of capital. Our findings highlight numerical disclosure's role in reducing information risk and emphasize its importance in financial disclosures.

Keywords: Textual analysis; Quantitative disclosure; Numerical information; Earnings conference calls; Voluntary disclosure (search for similar items in EconPapers)
JEL-codes: G10 G12 G14 M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:94:y:2025:i:c:s0929119925000811

DOI: 10.1016/j.jcorpfin.2025.102813

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