Does concrete language in disclosures increase willingness to invest?

Elliott, William; Rennekamp, Kristina M.; White, Brian J.

doi:10.1007/s11142-014-9315-6

Cited by 138 publications

(63 citation statements)

References 64 publications

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“…Second, research suggests that quantitative numbers such as digits are more specific and concrete than nonspecific quantifiers such as “many” or “few” (Jerez‐Fernandez, Angulo, & Oppenheimer, ; Zhang & Schwarz, ). In particular, in an accounting study of firms’ financial disclosures, Elliott et al () argued that specific numbers or digits represent concrete language. Further, Larrimore et al () argued that specific numbers are “concrete financial details.” (Larrimore et al, , p. 24).…”

Section: Methodsmentioning

confidence: 99%

“…Extant theory and empirical research about language concreteness from the linguistics literature, as well as psychology literature guides the development of our measure of language concreteness. According to this work, concrete language is characterized by the use of verbs, numbers, and past focused words, while abstract (non-concrete) language is characterized by adjectives, nonspecific quantifiers, and the use of future-focused words (Elliott, Rennekamp, & White, 2015;Semin & Fiedler, 1988;Snefjella & Kuperman, 2015). First, research in the linguistics literature shows that verbs are considered more concrete than adjectives because verbs describe actions and behaviors that are typically observable and verifiable.…”

Section: Independent Variablesmentioning

confidence: 99%

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Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions

Pan

McNamara

Lee

et al. 2017

Strategic Management Journal

102

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Research Summary: Building on the communications and linguistics literatures, we explore the language attributes managers use in interactions with investors and the subsequent reactions of investors. Specifically, we hypothesize that top managers’ use of concrete language attributes in communication with investors broadly associates with positive investor reactions. We further posit that this relationship will be moderated by the level of firm risk. Our results support our hypotheses and, thus, offer important insights to the impression management literature. First, subtle elements of managerial communication can have significant impression management consequences. More specifically, language concreteness is a key language attribute that generally induces positive investor responses. Finally, the effectiveness of language concreteness is conditional on the informational environment of the firm. Managerial Summary: How can managers communicate in a way that presents the firm more positively or reduces the negativity associated with perceived firm risks? Our findings indicate that choosing appropriate persuasive language features in interactions with investors can help a firm manage its impressions. Specifically, we find that top managers’ use of concrete language that provides details and specific information in communication with investors, in general, garners positive investor reactions. Further, the effectiveness of top managers’ use of concrete language depends on investor concerns. More specifically, we find that when a firm is seen as having a riskier profile, using concrete language helps induce a more positive investor response; while when a firm is seen as low risk, using abstract language may be more beneficial.

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Section: Methodsmentioning

confidence: 99%

Section: Independent Variablesmentioning

confidence: 99%

Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions

Pan

McNamara

Lee

et al. 2017

Strategic Management Journal

102

View full text Add to dashboard Cite

show abstract

“…Arguments related to the size of the market and the venture's intermediate performance were mostly based on quantitative data. As claims that are supported with specific evidence are seen as more plausible by investors (Brooke Elliott et al, 2015;Grégoire et al, 2008;Perelman, 2008), using qualitative and quantitative data as grounds enhanced narrative plausibility.…”

Section: The Effect Of Micro-level Argumentation On Narrative Resonanmentioning

confidence: 99%

Pitching a business idea to investors: How new venture founders use micro-level rhetoric to achieve narrative plausibility and resonance

Werven

Bouwmeester²,

Cornelissen

2019

International Small Business Journal

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For entrepreneurial narratives to be effective, they need to be judged as plausible and have to resonate with an audience. Prior research has, however, not examined or explained how entrepreneurs try to meet these criteria. In this article, we addressed this question by analysing the micro-level arguments underpinning the pitch narratives of entrepreneurs who joined a business incubator. We discerned four previously unidentified rhetorical strategies that these entrepreneurs used to achieve narrative plausibility and resonance. Our findings further suggest that temporality and product development status may shape how entrepreneurs use these strategies. By outlining these aspects of entrepreneurial rhetoric, we contribute to opening up the black box of narrative resonance and plausibility and advance work on the role of rhetoric in entrepreneurship.

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“…Prior research suggests that mindset can vary with features of the investment environment. For example, short versus long investment horizon (White ) and proximally close versus distant location of the investment (Elliott, Rennekamp, and White ) have been shown to induce a concrete versus abstract mindset. In a reporting context, we predict that variation in the language that firms use to introduce their efforts also causes investors to adopt different mindsets.…”

Section: Background and Hypothesis Developmentmentioning

confidence: 99%

How Disclosure Features of Corporate Social Responsibility Reports Interact with Investor Numeracy to Influence Investor Judgments

Elliott

Grant

Rennekamp

2017

Contemporary Accting Res

Self Cite

104

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Firms' Corporate Social Responsibility (CSR) reports typically frame their strategies in terms of either community or global efforts (i.e., "strategy frame"). Further, the style used to depict CSR performance in reports often highlights either pictures or words (i.e., "presentation style"). These two prominent disclosure features of CSR reports promote a natural fit or misfit in the focus (relatively low-level or high-level focus) investors adopt when thinking about the firm and its CSR efforts. Further, these disclosure features likely have different effects on investors depending on their numeracy or, in other words, the way that they naturally process numerical information. In this study, we predict and find that a fit between the strategy frame and the presentation style of a firm's CSR report causes less numerate investors to be more willing to invest than when a fit is not present. Specifically, we find that a fit leads less numerate investors to experience subjective feelings of processing fluency and, in turn, positive affect that serves as a cue that the positive CSR performance information can be relied upon, which positively influences willingness to invest. Our results have implications for both CSR reports as well as other types of firm disclosures that increasingly vary along similar disclosure characteristics. Our results also contribute to both the growing literature on presentation effects in accounting, as well as the broader business literature on CSR reporting. favorisent une ad equation (ou une inad equation) naturelle entre l'objectif (plus ou moins elev e) auquel adh erent les investisseurs lorsqu'ils songent a l'entreprise et les efforts d eploy es par cette derni ere au chapitre de la RSE. Au surplus, ces caract eristiques de l'information sont susceptibles d'avoir une incidence diff erente sur les investisseurs selon la num eratie de ces derniers, c'est-a-dire la comp etence avec laquelle ils traitent spontan ement les informations num eriques. Les auteurs posent et confirment l'hypoth ese selon laquelle, en pr esence d'une ad equation entre le cadre strat egique et le style de pr esentation des rapports que produit une soci et e en mati ere de RSE, les investisseurs dont la comp etence num erique est inf erieure sont davantage dispos es a investir qu'en l'absence d'ad equation. Ils constatent plus particuli erement que la pr esence d'une ad equation am ene les investisseurs moins comp etents a eprouver une impression subjective de fluidit e de traitement et, par ricochet, un affect positif leur servant d'indicateur de fiabilit e de l'information positive quant a la performance en mati ere de RSE, ce qui influe favorablement sur leur disposition a investir. Les r esultats de l' etude ont des r epercussions tant sur les rapports qui emanent des soci et es en mati ere de RSE que sur leurs informations d'autre nature pr esentant des caract eristiques similaires mais dont les variantes ne cessent de se multiplier. Ces r esultats contribuent egalement a l'enrichissement des ecrits sur les con...

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Does concrete language in disclosures increase willingness to invest?

Cited by 138 publications

References 64 publications

Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions

Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions

Pitching a business idea to investors: How new venture founders use micro-level rhetoric to achieve narrative plausibility and resonance

How Disclosure Features of Corporate Social Responsibility Reports Interact with Investor Numeracy to Influence Investor Judgments

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