Electronic Resource

Article - The effect of a warning on investors’ reactions to disclosure readability Volume 28, Issue 2 Hal 769–791

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Managers may strategically use discretion over disclosure language to reduce the effect of bad
news and/or amplify the effect of good news. We experimentally test how a warning highlighting
management’s discretion over disclosure language affects investors’ reactions to more and less
readable disclosures. We find that the warning works as intended for good news disclosures,
causing them to reduce their valuations of the firm when readability choices match management
incentives. In the case of bad news disclosures, however, investors do not react as intended to the
warning. Additional experiments show that (1) the warning works for good news disclosures
because of its reference to the way disclosure content could be communicated and not because of
its reference to the disclosure content itself, and (2) the warning does not work as intended for
bad news disclosures because investors do not believe that management strategically uses
readability in this situation. Our results should be informative to regulators, given their interest in
both promoting more readable disclosures and protecting investors.

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Ketersediaan

Informasi Detail

Judul Seri

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No. Panggil

657.3 KOO t

Penerbit

: Springer Gabler (Springer Nature), Wiesbaden, Jerman., 2021

Deskripsi Fisik

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Bahasa

English

ISBN/ISSN

1573-7136

Klasifikasi

657.3

Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

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Info Detail Spesifik

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Pernyataan Tanggungjawab

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Versi lain/terkait

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