Academic Bibliography

 Search 200 years of publications by Ghent University researchers.
Advanced search
Add to list
  1. Search results
  2. When does the tone of earnings press ...

When does the tone of earnings press releases matter?

Kris Boudt (UGent) , James Thewissen and Wouter Torsin
(2018) INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS. 57. p.231-245
Author
Organization
Abstract
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.
Keywords
CONFERENCE CALLS, INFORMATION, ANNOUNCEMENTS, EQUILIBRIUM, DISCLOSURE, LANGUAGE, RETURNS, ANALYST, TESTS, Textual sentiment, Firm performance, Investor reaction, Tone, informativeness, Information asymmetry

Citation

Please use this url to cite or link to this publication:

MLA
Boudt, Kris, et al. “When Does the Tone of Earnings Press Releases Matter?” INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS, vol. 57, 2018, pp. 231–45, doi:10.1016/j.irfa.2018.02.002.
APA
Boudt, K., Thewissen, J., & Torsin, W. (2018). When does the tone of earnings press releases matter? INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS, 57, 231–245. https://doi.org/10.1016/j.irfa.2018.02.002
Chicago author-date
Boudt, Kris, James Thewissen, and Wouter Torsin. 2018. “When Does the Tone of Earnings Press Releases Matter?” INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS 57: 231–45. https://doi.org/10.1016/j.irfa.2018.02.002.
Chicago author-date (all authors)
Boudt, Kris, James Thewissen, and Wouter Torsin. 2018. “When Does the Tone of Earnings Press Releases Matter?” INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS 57: 231–245. doi:10.1016/j.irfa.2018.02.002.
Vancouver
1.
Boudt K, Thewissen J, Torsin W. When does the tone of earnings press releases matter? INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS. 2018;57:231–45.
IEEE
[1]
K. Boudt, J. Thewissen, and W. Torsin, “When does the tone of earnings press releases matter?,” INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS, vol. 57, pp. 231–245, 2018.
@article{8600206,
  abstract     = {{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.}},
  author       = {{Boudt, Kris and Thewissen, James and Torsin, Wouter}},
  issn         = {{1057-5219}},
  journal      = {{INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS}},
  keywords     = {{CONFERENCE CALLS,INFORMATION,ANNOUNCEMENTS,EQUILIBRIUM,DISCLOSURE,LANGUAGE,RETURNS,ANALYST,TESTS,Textual sentiment,Firm performance,Investor reaction,Tone,informativeness,Information asymmetry}},
  language     = {{eng}},
  pages        = {{231--245}},
  title        = {{When does the tone of earnings press releases matter?}},
  url          = {{http://doi.org/10.1016/j.irfa.2018.02.002}},
  volume       = {{57}},
  year         = {{2018}},
}
Altmetric
View in Altmetric
Web of Science
Times cited: