Linguistic errors and investment decisions: the case of ICO white papers
Jennifer Thewissen,
James Thewissen,
Wouter Torsin and
Özgür Arslan-Ayaydin
The European Journal of Finance, 2023, vol. 29, issue 7, 826-868
Abstract:
Drawing on language expectancy theory, we predict that linguistic errors in ICO white papers negatively impact investors’ willingness to financially contribute to ICO projects. We manually annotate a sample of 546 ICO white papers according to 13 different error subcategories related to spelling and grammar. The error-annotated data are subsequently submitted to regression analyses which confirm that linguistic errors discourage potential investments in ICOs. Specifically, our analyses reveal the presence of ‘high penalty’ vs. ‘low penalty’ errors which result in higher vs. lower financial investment losses for the ICOs. The negative impact of language errors is stronger when ICO white papers are (1) written in native English-speaking countries and (2) from countries without cryptocurrency regulation. Results from an experiment confirm that this relationship is not driven by the entrepreneur- or investor-specific characteristics. Overall, we highlight that the reader identifies linguistic errors as a major ‘red flag’ that ultimately affects financial decision-making.
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
http://hdl.handle.net/10.1080/1351847X.2022.2075780 (text/html)
Access to full text is restricted to subscribers.
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:taf:eurjfi:v:29:y:2023:i:7:p:826-868
Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REJF20
DOI: 10.1080/1351847X.2022.2075780
Access Statistics for this article
The European Journal of Finance is currently edited by Chris Adcock
More articles in The European Journal of Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().