Causal Reasoning in Corporate Annual Reports: The Truth and Nothing But the Truth?

René Fahr () and Anica Rose ()
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René Fahr: Paderborn University
Anica Rose: Paderborn University

No 25, Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics

Abstract: Annual reports are companies’ business cards to present and explain important corporate performance outcomes, both internally and externally. On the basis of the well-explored self-serving attribution bias in publicly available but unaudited documents, the question remains whether the tendency to take personal credit for positive outcomes (acclaiming attributions) but to assign blame for negative outcomes to external circumstances (defensive attributions) also holds for legally regulated management reports. Beyond that, it remains to be clarified whether acclaiming and defensive attribution patterns are determined either by surrounding conditions (i.e. cognitive information-processing explanation) or by impression management strategies (i.e. motivational explanation). A unique panel dataset of Germany’s largest blue-chip corporations provides evidence of the existence of self-serving attribution patterns in the explanations provided for cause-consequence relations in corporate management reports. With regard to acclaiming attributions, our findings support motivational intentions. With regard to the defensive attributions, however, the cognitive information-processing explanation dominates.

Keywords: annual reports; management reports; content analysis; self-serving attributions (search for similar items in EconPapers)
JEL-codes: L29 (search for similar items in EconPapers)
Pages: 40
Date: 2017-01
New Economics Papers: this item is included in nep-acc
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