Date of Award

2021

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Graduate Group

Accounting

First Advisor

Brian Bushee

Abstract

Prior evidence suggests that managers learn indirectly from stock prices, which contain private information impounded by informed investors’ trades. However, stock price is an indirect aggregate signal, which is likely to be insufficient for managerial learning. I propose that managers seek out direct interactions with institutional investors as a further mechanism to learn relevant information about their firms. Using investor conferences and investor days as the medium for direct learning, I find that managers seek more direct interactions when they have a high demand for information concerning industry trends and supply chain dynamics, and when they expect their current base of institutional investors to be knowledgeable. I also predict that information learned through direct interactions will be reflected in the manager’s subsequent corporate and personal decisions. I find that the frequency and accuracy of management forecasts increase after direct learning. Comparing insider trades in the same firm-month, trades executed by participating insiders within seven days after a conference earn greater positive abnormal returns, consistent with managers’ information set expanding as a result of their direct learning.

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Available to all on Saturday, May 11, 2024

Included in

Accounting Commons

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