Description
Abstract: We document the effects of institutional investors on the qualitative information disclosure of firms during earnings conference calls. Using conference call and institutional ownership data between 2005 and 2016, we find that aggregate institutional ownership dampens conference call tone. The effects of institutional investors on tone are causal based on results from indexed firms. Consistent with hypotheses regarding investors' horizons, short-term institutional investors are associated with a more positive conference call tone, as well as more opportunistic trading, whereas long-term investors are associated with a more negative tone. Market participants can generally disentangle the impact of institutional investors on tone based on investor type.