Reference : Does managerial ability affect disclosure? Evidence from earnings press releases
Scientific journals : Article
Business & economic sciences : Finance
Does managerial ability affect disclosure? Evidence from earnings press releases
Yan, Beibei [Shanghai University > SHU-UTS SILC Business School > > >]
Arslan-Ayaydin, Ozgur [University of Illinois at Chicago > Department of Finance > > >]
Thewissen, James [Université Catholique de Louvain - UCL > Department of Finance > > >]
Torsin, Wouter mailto [Université de Liège - ULiège > HEC Liège : UER > Financial Reporting and Audit >]
Asian Review of Accounting
Yes (verified by ORBi)
United Kingdom
[en] Using a sample of about 24,000 earnings press releases by S&P1500 firms between 2004 and 2013, we find that low-ability managers inflate the disclosure tone to positively influence labor market's perceptions about their ability. This effect is magnified for younger and shorter-tenured managers, for firms with more intense monitoring and during bear markets. We also show that the tone of earnings press releases of low-ability managers is less informative to predict future firm performance and results in a lower stock price reaction. Overall, our findings confirm that managerial ability affects the credibility of qualitative information.

File(s) associated to this reference

Fulltext file(s):

Restricted access
10-1108_ARA-03-2020-0036.pdfPublisher postprint414.19 kBRequest copy

Bookmark and Share SFX Query

All documents in ORBi are protected by a user license.