Francois Brochet
5 Results
- 07 Nov 2012
- Working Papers
Causes and Consequences of Linguistic Complexity in Non-US Firm Conference Calls
Does the form in which financial information is presented have consequences for the capital markets? The authors examine the level of linguistic complexity of more than 11,000 conference call transcripts from non-US firms between 2002 and 2010. Findings show that the linguistic complexity of calls varies with country-level factors such as language barriers, but also with firm characteristics. Firms with more linguistic complexity in their conference calls show less trading volume and price movement following the information releases. Overall, these results may be useful to foreign firms that wish to communicate with investors globally. Analysts and investors around the world may also find the results helpful since they might be able to push managers to speak in a less complex manner. This study is the first to analyze conference calls in a cross-country setting. Read More
- 02 Mar 2012
- Working Papers
Short-Termism, Investor Clientele, and Firm Risk
In recent decades, commentators have argued that many corporations exhibit short-termism, a tendency to take actions that maximize short-term earnings and stock prices rather than the long-term value of the corporation. The authors develop a proxy for short-termism at the company level using conference call transcripts and then examine whether companies with more short-term horizons have (i) an investor base that is more short-term oriented, (ii) higher stock return volatility, and (iii) higher equity beta. The authors find that short-term oriented firms have more short-term oriented investors and higher risk. This paper contributes to the literature on the capital market effects of managerial and investor horizons. Read More
- 19 May 2011
- Working Papers
Mandatory IFRS Adoption and Financial Statement Comparability
In the past decade, many countries have adopted International Financial Reporting Standards (IFRS) developed by the International Accounting Standards Board, which has impelled economists to examine the benefits of the standards. This paper discusses how IFRS adoption affects financial reporting comparability—that is, the properties of financial statements that allow users to identify similarities or differences between the economics of different reporting entities over any given period of time. Research was conducted by Francois Brochet and Edward J. Riedl of Harvard Business School, and Alan Jagolinzer of the University of Colorado at Boulder. Read More
- 19 Apr 2011
- Working Papers
Top Executive Background and Financial Reporting Choice: The Case of Goodwill Impairment
In the management literature, some theories hold that corporate actions and strategic choices can be partially predicted by knowing the functional background of executives. The authors provide evidence on how CEOs and CFOs who were former investment bankers, auditors, and private equity/venture capital executives managed decisions around goodwill impairments (essentially goodwill charge-offs)—a complex accounting choice involving a high degree of managerial discretion. Research by HBS professor Francois Brochet and doctoral candidate Kyle Welch. Read More