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Does the ease of reading of financial disclosures influence investment decision?

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  • Arora, Jagriti
  • Chakraborty, Madhumita

Abstract

The study, through an experimental approach, provides evidence on how the human mind responds to easy versus difficult to read financial disclosures and takes decisions on whether to invest in financial products. The results of the study highlight the need for the regulators to mandate that such disclosures be made in simple language for better investment decision-making by the masses.

Suggested Citation

  • Arora, Jagriti & Chakraborty, Madhumita, 2021. "Does the ease of reading of financial disclosures influence investment decision?," Economics Letters, Elsevier, vol. 204(C).
    • Handle: RePEc:eee:ecolet:v:204:y:2021:i:c:s0165176521001609
    DOI: 10.1016/j.econlet.2021.109883
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    References listed on IDEAS

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    1. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
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    Cited by:

    1. Bongini, Paola & Osborne, Francesco & Pedrazzoli, Alessia & Rossolini, Monica, 2022. "A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    2. Cruciani, Caterina & Santagiustina, Carlo R.M.A., 2023. "The present and future of sustainability disclosure in equity investment funds’ pre-contractual documents: Mapping ESG discourse through STM," Finance Research Letters, Elsevier, vol. 58(PA).
    3. Eman Ismail & Yasser Tawfik Halim & Mohamed Samy EL-Deeb, 2023. "Corporate reputation and shareholder investment: a study of Egypt's tourism listed companies," Future Business Journal, Springer, vol. 9(1), pages 1-15, December.
    4. Hunjra, Ahmed Imran & Hassan, M. Kabir & Zaied, Younes Ben & Managi, Shunsuke, 2023. "Nexus between green finance, environmental degradation, and sustainable development: Evidence from developing countries," Resources Policy, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Readability; Financial disclosure; Stock market participation; Mutual fund;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G4 - Financial Economics - - Behavioral Finance
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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