The value of words in financial disclosures: Tone and the corporate environment.

Over the last decade, textual analysis gained popularity in the study of financial communication with the widespread availability and accessibility of firm-level disclosures. The purpose of this dissertation is to increase our understanding of how disclosure tone is composed. In particular, it focuses on how the environment in which the firm operates explains this linguistic attribute and its associated information value. It does so in the setting of earnings press releases. This study of the corporate environment takes place in three parts. These are (i) the firm's information environment, (ii) the labor market environment, and (iii) its shareholder environment. Each of the share the potential to affect the dissemination of information. As such, the insights from each of these chapters, at large, have a practical contribution in pointing out if/when financial narratives serve as a useful tool for capital market participants. In doing so, it also increases our understanding of the extent to which qualitative information contains incremental information to that of quantitative data.status: publishe

The Anglo-Saxon premium in foreign CEO compensation

peer reviewedThis paper examines whether foreign CEOs coming from Anglo-Saxon countries receive higher compensation than other foreign CEOs. The findings reveal a strongly positive association between Anglo-Saxon nationality and CEO compensation, including cash and non-cash components; and this finding is limited to a subset of firms that are headquartered in non-culturally and nonethnically diverse counties. We interpret these findings as firms rewarding CEOs more for their perceived fit within the company given their shared cultural and social values, rather than Anglo- Saxon CEOs having higher rent-extracting capacities. Finally, the CEO’s country of origin does not explain current and future firm financial performance

International Earnings Announcements: Tone, Forward-looking Statements, and Informativeness

This paper examines two attributes of earnings press releases issued by firms cross-listed on U.S. stock exchanges: the tone and frequency of forward-looking statements. A more conservative tone and a greater proportion of forward-looking statements are often viewed as contributing to more credible disclosures. Our analysis indicates that culturally and institutionally more distant firms are generally less positive in their disclosures and include more forward-looking statements than U.S. firms. Further, we find that the tone and frequency of forward-looking statements of crosslisted firms’ earnings announcements are more informative than those of U.S. firms in predicting future firm performance, and this informativeness generally increases with the cultural and institutional distance of the home country from the U.S. In explaining market reaction to earnings announcements, tone informativeness in particular increases with the cultural distance of the home country from the U.S. Overall, in the context of home bias theory, we interpret our findings as suggesting that a cautious disclosure tone and more forward-looking information serve to mitigate potential home bias-related credibility and asymmetric information concerns arising from cultural and institutional distance

International Earnings Announcements: Tone, Forward-looking Statements, and Informativeness

This paper examines two attributes of earnings press releases issued by firms cross-listed on U.S. stock exchanges: the tone and frequency of forward-looking statements. A more conservative tone and a greater proportion of forward-looking statements are often viewed as contributing to more credible disclosures. Our analysis indicates that culturally and institutionally more distant firms are generally less positive in their disclosures and include more forward-looking statements than U.S. firms. Further, we find that the tone and frequency of forwardlooking statements of cross-listed firms’ earnings announcements are more informative than those of U.S. firms in predicting future firm performance, and this informativeness generally increases with the cultural and institutional distance of the home country from the U.S. In explaining market reaction to earnings announcements, tone informativeness in particular increases with the cultural distance of the home country from the U.S. Overall, in the context of home bias theory, we interpret our findings as suggesting that a cautious disclosure tone and more forward-looking information serve to mitigate potential home bias-related credibility and asymmetric information concerns arising from cultural and institutional distanc