Leading with Passion

Elena Loutskina, Oleksandr Talavera (), Shuxing Yin and Mao Zhang
Additional contact information
Elena Loutskina: University of Virginia
Shuxing Yin: University of Sheffield
Mao Zhang: University of St Andrews

Discussion Papers from Department of Economics, University of Birmingham

Abstract: We examine how passionate delivery in managerial communication influences market participants' perceptions and decision-making processes. Using machine learning techniques to analyze audio recordings of earnings conference calls, we quantify passion through executives' vocal expressions. Our findings show that passionate delivery enhances analysts' earnings forecast precision and optimism. Analysts quickly learn the informational content of the vocal passion, interpreting it as a positive signal. This effect varies depending on analyst experience and firm information environment. In contrast, investors exhibit a delayed positive response to vocal passion following the earnings call period. Overall, our study provides new evidence that the way executives communicate, beyond the content of their words, plays a critical role in shaping market outcomes.

Keywords: conference calls; vocal pitch; emotional intensity; soft information; market reaction; managerial capabilities (search for similar items in EconPapers)
JEL-codes: G12 G14 G30 G34 G41 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022-10
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