Institutional Investor Conference Calls and Information Diffusion Effect

This paper explores the effects of information diffusion by investigating a sample of firms that voluntarily held institutional investor conference calls (IICCs) between 2004 and 2011. The empirical results reveal a positive correlation between the abnormal returns of IICCs and average industry returns, indicating that IICCs exhibit information diffusion effects and diffuse asymmetry. Moreover, the information environment (IE) of firms plays a critical role in information dissemination. For firms with an IE that is more conducive for information dissemination, the effects of information diffusion are enhanced. Firms with high information asymmetry have strong information diffusion effects. Key words: Institutional investor conference call, information diffusion effect, lead-lag effect, information environment