Disclosure Tone Management and Labor Unions

[en] By analyzing the influence of labor unions on the narrative content of corporate disclosures, we provide empirical evidence that managers deflate the tone of earnings press releases in order to convey to unions a less optimistic image of firm financial performance. We find that the tone of the qualitative information in earnings press releases is significantly less optimistic as the degree of unionization increases, and particularly when financial performance is strong. The results of quasi-natural experiments suggest that labor unions causally affect the use of tone deflation, and the deflation is stronger during labor negotiations. Our findings also indicate that labor unions lead to a significant weakening of the signaling value of the tone of earnings press releases in predicting future performance.

Disciplines :

Finance
Accounting & auditing

Author, co-author :

Arslan-Ayaydin, Ozgur; University of Illinois at Chicago > Department of Finance

Thewissen, James; Université Catholique de Louvain - UCL > Department of Finance

Torsin, Wouter ; Université de Liège - ULiège > HEC Liège : UER > Financial Reporting and Audit

Language :

English

Title :

Disclosure Tone Management and Labor Unions

Publication date :

2021

Journal title :

Journal of Business Finance and Accounting

ISSN :

0306-686X

eISSN :

1468-5957

Publisher :

Blackwell, Oxford, United Kingdom

Volume :

Issue :

1-2

Pages :

102-147

Peer reviewed :

Peer Reviewed verified by ORBi

Name of the research project :

11C8918N

Funders :

FWO - Fonds Wetenschappelijk Onderzoek Vlaanderen [BE]

Available on ORBi :

since 12 December 2020

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145 (15 by ULiège)

Number of downloads

5 (5 by ULiège)

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Scopus citations^®

Scopus citations^®
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