Article (Scientific journals)
When does the Tone of Earnings Press Releases Matter?
Boudt, Kris; Thewissen, James; Torsin, Wouter
2018In International Review of Financial Analysis
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Abstract :
[en] The tone of a firm's financial disclosure is increasingly used as a variable in panel data regressions to predict future performance and explain investors' reaction at earnings announcement. We investigate when tone is informative, and argue that the informativeness of tone increases with the information asymmetry between firms and investors. Using a sample of over 50,000 earnings press releases of about 1800 U.S. public firms between 2004 and 2015, we find that firm growth, size, age, complexity and forecast inaccuracy are key drivers of tone informativeness. The effect is economically significant, since, compared to the reference case of a transparent firm, we find that the slope coefficient of tone doubles or even quadruples in panel data regressions when the firm operates in an environment with high information asymmetry.
Disciplines :
Finance
Author, co-author :
Boudt, Kris;  Universiteit Gent - UGent
Thewissen, James;  Université Catholique de Louvain - UCL
Torsin, Wouter ;  Université de Liège - ULiège > HEC Liège : UER > Financial Reporting and Audit
Language :
English
Title :
When does the Tone of Earnings Press Releases Matter?
Publication date :
2018
Journal title :
International Review of Financial Analysis
ISSN :
1057-5219
eISSN :
1873-8079
Publisher :
Elsevier, Amsterdam, Netherlands
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBi :
since 13 December 2020

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