 Does peer firms’ tone affect corporate investment? Evidence from ChinaLiang Chang, Na Tan, Xinyue Zhang and Yiyun Yuan International Review of Financial Analysis, 2023, vol. 90, issue C Abstract: It is unclear how valuable textual disclosures from peers are to a firm’s investment decisions in emerging markets. Using a dataset of Chinese listed firms from 2007 to 2019, the results show that peers’ MD&A tone has a significant and positive effect on corporate investment, supporting the incremental information content hypothesis in emerging markets. A one standard deviation increase in peers’ tone raises investment by about 5%. Further analyses show the effect of peers’ tone on investment is higher when peers’ disclosure quality is higher, the firm’s management has a stronger motivation to learn, or the industry competitiveness is greater. After addressing the endogeneity problem, ruling out alternative explanations, and a series of robustness tests, the results remain consistent. This paper confirms the value of textual disclosures and enriches the study of their economic consequences in emerging markets. Keywords: MD&A tone; Peer effect; Investment; Textual analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923002570 DOI: 10.1016/j.irfa.2023.102741 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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