Speaking of the short-term: disclosure horizon and managerial myopia

Francois Brochet (), Maria Loumioti () and George Serafeim ()
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Francois Brochet: Boston University
Maria Loumioti: University of Southern California
George Serafeim: Harvard Business School

Review of Accounting Studies, 2015, vol. 20, issue 3, No 4, 1122-1163

Abstract: Abstract We study conference calls as a voluntary disclosure channel and create a proxy for the time horizon that senior executives emphasize in their communications. We find that our measure of disclosure time horizon is associated with capital market pressures and executives’ short-term monetary incentives. Consistent with the language emphasized during conference calls partially capturing short-termism, we show that our proxy is associated with earnings and real activities management. Overall, the results show that the time horizon of conference call narratives can be informative about managers’ myopic behavior.

Keywords: Short-termism; Managerial myopia; Earnings management; Real activities management; Accounting performance (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11142-015-9329-8

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