Does the rhetoric always hide bad intention: annual report’s tone and stock crash risk

Zhou, Bo; Zhang, Cheng; Zeng, Qingsheng

doi:10.1080/21697213.2018.1522038

Cited by 10 publications

(4 citation statements)

References 26 publications

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“…Li [53] argued that dictionary-based approaches are not ideal for finance research, even though this method has been used extensively in the fields of Western languages and culture. In the Chinese context, researchers have usually translated the English words in the LM dictionary into Chinese and measured tone by calculating negative/positive word frequencies based on the translated word lists [54]. However, this process introduces considerable bias and renders the method inapplicable to the Chinese context, as there are significant differences in linguistic elements such as word meanings, expressions, sentence structure, and cultural elements between the Chinese and English languages.…”

Section: Social Media Criticism Posted By Investorsmentioning

confidence: 99%

Corporate Social Responsibility Disclosure: Responding to Investors’ Criticism on Social Media

Zhang

Yang

2021

IJERPH

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Companies use corporate social responsibility (CSR) disclosures to communicate their social and environmental policies, practices, and performance to stakeholders. Although the determinants and outcomes of CSR activities are well understood, we know little about how companies use CSR communication to manage a crisis. The few relevant CSR studies have focused on the pressure on corporations exerted by governments, customers, the media, or the public. Although investors have a significant influence on firm value, this stakeholder group has been neglected in research on CSR disclosure. Grounded in legitimacy theory and agency theory, this study uses a sample of Chinese public companies listed on the Shanghai Stock Exchange to investigate CSR disclosure in response to social media criticism posted by investors. The empirical findings show that investors’ social media criticism not only motivates companies to disclose their CSR activities but also increases the substantiveness of their CSR reports, demonstrating that companies’ CSR communication in response to a crisis is substantive rather than merely symbolic. We also find that the impact of social media criticism on CSR disclosure is heterogeneous. Non-state-owned enterprises, companies in regions with high levels of environmental regulations, and companies in regions with local government concern about social issues are most likely to disclose CSR information and report substantive CSR activities. We provide an in-depth analysis of corporate CSR strategies for crisis management and show that crises initiated by investors on social media provide opportunities for corporations to improve their CSR engagement.

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Section: Social Media Criticism Posted By Investorsmentioning

confidence: 99%

Corporate Social Responsibility Disclosure: Responding to Investors’ Criticism on Social Media

Zhang

Yang

2021

IJERPH

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Section: Introductionmentioning

confidence: 99%

“…Annual reports are one of the important ways for listed companies to disclose information to the public, and most of them are textual and numerical information. Management tone is one of the important dimensions to measure textual information (Zhou et al, 2019). Still, few studies have focused on the influence of customer annual report tone on suppliers' business decisions and corporate governance in the cross-firm perspective.…”

Section: Introductionmentioning

confidence: 99%

Customers' annual report tone and suppliers' innovation decisions: evidence from China

Xin

Zeng

Luo

2022

EJIM

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PurposeThis paper examines whether and how customers' annual report tone affects suppliers' innovation decisions.Design/methodology/approachUsing the data from disclosed information on top five customers and annual report tone by Chinese listed firms, this paper used a two-way fixed effect model and intermediary effect model tests to explore the impact of customers' annual report tone on suppliers' innovation decisions.FindingsThe results indicate that the more positive the tone of customer annual reports is, the higher the suppliers' technological innovation level. The customers' annual report tone affects suppliers' innovation decisions through alleviating financing constraints and reducing the bullwhip effect. In addition, the authors find that the worse the supplier's bargaining power and the higher the customer's media coverage, the more significant the impact of positive customer annual report tone on the level of corporate technological innovation.Practical implicationsFor downstream customers, to improve the quality of their text information disclosure. For upstream suppliers, the tone of customers' annual reports has incremental information, so the attention to customers' text information should be strengthened. As far as the market is concerned, it is recommended that regulators should strictly require the quality of text information disclosure and introduce relevant penalty mechanisms better to regulate the quality of corporate text information disclosure.Originality/valueTo the best of the author's knowledge, this paper is the first to expand the research related to textual information from a supply chain innovation perspective. The textual information can provide incremental information, and spillover effects may occur among supply chains, affecting suppliers' innovation decisions. And it clarifies the specific mechanism by which the supply chain tone spillover effect affects corporate innovation, enriching the relevant research on supply chain influence mechanisms.

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“…Internal managers also like to mislead investors by reporting the good news (Brockman et al, 2013). The corporation hides the accumulation of bad news or publishes false good news is from the inside managers motivated by personal remuneration and career development (Friedman, 2014;Andreou et al, 2017;Zhou et al, 2018;An et al, 2020;Fang et al, 2021). The managers have strong incentives to cover up bad news in order to continue collecting additional allowances.…”

Section: Introductionmentioning

confidence: 99%

Factors Affecting Firm-specific Stock Price Crashes: A Review

2021

IJFS

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After reviewing some ten years of academic research on firm-specific stock price crash risk, using the firm as the subject, and in terms of internal and external sources of influencing factors to classify the factors affecting stock price crashes into internal and external factors. Internal corporate factors include managers, governance, investors, disclosure, culture and strategy. External factors include auditors, analysts, government, society and public events. The external factors will be a key focus on the future firm-specific stock price crash risk studies.

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Does the rhetoric always hide bad intention: annual report’s tone and stock crash risk

Cited by 10 publications

References 26 publications

Corporate Social Responsibility Disclosure: Responding to Investors’ Criticism on Social Media

Corporate Social Responsibility Disclosure: Responding to Investors’ Criticism on Social Media

Customers' annual report tone and suppliers' innovation decisions: evidence from China

Factors Affecting Firm-specific Stock Price Crashes: A Review

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