Effect of positive tone in MD&A disclosure on capital structure adjustment speed: evidence from China

Qian Wang, Duowen Wu and Lina Yan

Accounting and Finance, 2021, vol. 61, issue 4, 5809-5845

Abstract: We explore the influence of text tone on capital structure, especially the impact of positive tone in management discussion and analysis (MD&A) disclosures on the capital structure adjustment speed of Chinese listed firms in Shanghai and Shenzhen Stock Exchange. We find that positive tone in MD&A disclosures significantly promotes the dynamic adjustment of capital structure. Specifically, we identify two types of positive tone: exaggerated and true. We find that only true positive tone significantly promotes the adjustment speed of capital structure. This paper supplements the relevant literature on the dynamic adjustment of capital structure from the perspective of non‐financial narrative information, and provides evidence for the effect of strategic tone management in textual analysis.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://doi.org/10.1111/acfi.12777

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:61:y:2021:i:4:p:5809-5845

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is currently edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().