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Do firms strategically respond to retail investors on the online interactive information disclosure platform?

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  • Wu, Di
  • Gao, Shenghao
  • Chan, Kam C.
  • Cheng, Xiaoke

Abstract

Based on the official online interactive question and answer (Q&A) platform in China, we examine whether firms strategically change their response characteristics according to the tone of retail investors’ questions and how firms’ response choices affect stock market reactions to investors’ questions. Our findings show that firms respond less directly but more optimistically when the sentiment embedded in investors’ questions is more negative, consistent with the notions that firms are strategically responding to retail investors in the process of online interactive information disclosure. Additional analysis suggests that both the information embedded in the response and the textual characteristics of the response play an important role in stock valuation.

Suggested Citation

  • Wu, Di & Gao, Shenghao & Chan, Kam C. & Cheng, Xiaoke, 2022. "Do firms strategically respond to retail investors on the online interactive information disclosure platform?," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005675
    DOI: 10.1016/j.frl.2021.102631
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    Cited by:

    1. Qingbin Meng & Congyi Ju & Qinghua Huang & Song Wang, 2023. "The informativeness of investor communication with corporate insiders: Evidence from China," International Finance, Wiley Blackwell, vol. 26(2), pages 189-207, August.
    2. Liu, Xiangqiang & Liu, Jiayi & Liu, Jia & Zhai, Qiong, 2024. "Can investor-firm interactions mitigate ESG rating divergence? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    3. Wang, Maochuan & Yan, Youliang, 2023. "The dark side of investor interactive platforms: Evidence from corporate investment efficiency," Finance Research Letters, Elsevier, vol. 57(C).
    4. Liu, Huan & Tao, Yunqing & Zeng, Lin & Chen, Dong, 2023. "Investor-enterprise interactions and shadow banking of non-financial enterprises in China," Finance Research Letters, Elsevier, vol. 55(PB).
    5. Wang, Jun, 2023. "The impact of investor communication on enterprise green innovation," Finance Research Letters, Elsevier, vol. 57(C).
    6. Luo, Shen & Li, Yuanhui, 2024. "The tone of earnings communication conferences and trade credit financing of listed companies," Finance Research Letters, Elsevier, vol. 70(C).
    7. Du, Zhihui & Zheng, Xiaojia & Zhang, Chenye & Zhou, Rongxi, 2023. "Does the online interaction between retail investors and firm management affect capital structure?," Finance Research Letters, Elsevier, vol. 55(PA).
    8. Xie, Nan & Xu, Qifa & Jiang, Cuixia & Yang, Shanlin, 2023. "The determinants and consequences of firms’ boilerplate answers: Evidence from online interactive platforms in China," Finance Research Letters, Elsevier, vol. 58(PD).
    9. Zhao, Yujie & Yao, Zhanghao & Li, Yuanqin & Zhou, Ping, 2023. "Can high-quality interactions lower the cost of debt? Insights from interactive investor platforms," Finance Research Letters, Elsevier, vol. 58(PC).
    10. Zhu, Jing & Zhang, Chen & Zhao, Jingsong & Sun, Jiaojiao, 2024. "The impact of digital carbon communication on market response to carbon disclosure: The moderating effects of external supervision," Finance Research Letters, Elsevier, vol. 67(PB).

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    More about this item

    Keywords

    Investor relations; Online interactive information disclosure; Retail investors;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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