skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

When the Use of Positive Language Backfires: The Joint Effect of Tone, Readability, and Investor Sophistication on Earnings Judgments

Journal of accounting research, 2014-03, Vol.52 (1), p.273-302 [Peer Reviewed Journal]

2014 The Accounting Research Center at the University of Chicago Booth School of Business ;Copyright ©, University of Chicago on behalf of the Accounting Research Center, 2014 ;ISSN: 0021-8456 ;EISSN: 1475-679X ;DOI: 10.1111/1475-679X.12039 ;CODEN: JACRBR

Full text available

Citations Cited by
  • Title:
    When the Use of Positive Language Backfires: The Joint Effect of Tone, Readability, and Investor Sophistication on Earnings Judgments
  • Author: TAN, HUN-TONG ; YING WANG, ELAINE ; ZHOU, BO
  • Subjects: Disclosure ; Earnings ; Earnings per share ; Financial information ; Financial management ; Financial statements ; Framing effects ; Investment analysis ; Investment decision ; Investors ; Judgement ; Language ; Readability ; Sales growth ; Sales operations ; Sample mean ; Stock futures ; Studies
  • Is Part Of: Journal of accounting research, 2014-03, Vol.52 (1), p.273-302
  • Description: Recent studies document that market participants react positively to the positive language sentiment or tone embedded in financial disclosures, and that investors' reactions to negative news are more muted with poor disclosure readability. However, while language sentiment and readability co-occur in practice, their joint effects remain largely unexplored. In an experiment with MBA students as participants, we investigate how the effect of language sentiment varies with readability and investor sophistication level. We find that language sentiment influences investors' judgments when readability is low, but not when readability is high. Specifically, when readability is low, disclosures couched in positive language lead to higher earnings judgments for less sophisticated investors, but lower earnings judgments for more sophisticated investors. These findings show that the main effects of readability and language sentiment documented in prior studies have boundary effects, and may reverse when both variables are jointly considered along with investor sophistication.
  • Publisher: Chicago: Blackwell Publishing Ltd
  • Language: English
  • Identifier: ISSN: 0021-8456
    EISSN: 1475-679X
    DOI: 10.1111/1475-679X.12039
    CODEN: JACRBR
  • Source: Alma/SFX Local Collection
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait