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Manager‐specific manipulation of tone and stock price synchronicity

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Listed:
  • Miao Jiang
  • Bo Zhu
  • Luxi Li

Abstract

Using a sample of Chinese listed firms from 2008 to 2020, we find that manager‐specific upward manipulation of tone in the Management Discussion and Analysis (MD&A) section is associated with greater stock price synchronicity. This suggests that upward tone manipulation decreases the stock's idiosyncratic information content. This relationship between abnormally positive tone and stock price synchronicity is negatively moderated by the firm's revenue growth rate, while investor irrational sentiment positively moderates this relationship. Additionally, positive tone manipulation significantly increases audit aggressiveness and decreases analyst optimism bias.

Suggested Citation

  • Miao Jiang & Bo Zhu & Luxi Li, 2024. "Manager‐specific manipulation of tone and stock price synchronicity," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(4), pages 3803-3821, December.
    • Handle: RePEc:bla:acctfi:v:64:y:2024:i:4:p:3803-3821
    DOI: 10.1111/acfi.13283
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