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Do firms effectively communicate with financial stakeholders? A conceptual model of corporate communication in a capital market context

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  • Niamh M. Brennan
  • Doris M. Merkl-Davies

Abstract

We identify what constitutes effective communication between firms and their financial stakeholders in a capital market context and establish criteria against which effectiveness can be evaluated. To do this, we introduce the concept of connectivity from the communication studies literature. We conceptualise connectivity as comprising three components: textual connectivity, intertextual connectivity, and relational connectivity. Connectivity refers to the ability to connect different sections of a text (textual connectivity), to connect texts of different time periods or different genres (intertextual connectivity), and to connect firms with their audiences (relational connectivity). We then propose criteria for judging effective corporate communication in a capital market context. Finally, we assess how digital communication and social media provide opportunities for improving connectivity in corporate communication for a broader range of shareholders.

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  • Niamh M. Brennan & Doris M. Merkl-Davies, 2018. "Do firms effectively communicate with financial stakeholders? A conceptual model of corporate communication in a capital market context," Accounting and Business Research, Taylor & Francis Journals, vol. 48(5), pages 553-577, July.
    • Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:553-577
    DOI: 10.1080/00014788.2018.1470143
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    2. Ciaran Heavey & Zeki Simsek & Christina Kyprianou & Marten Risius, 2020. "How do strategic leaders engage with social media? A theoretical framework for research and practice," Strategic Management Journal, Wiley Blackwell, vol. 41(8), pages 1490-1527, August.
    3. Kim T. Baumgartner & Carolin A. Ernst & Thomas M. Fischer, 2022. "How Corporate Reputation Disclosures Affect Stakeholders’ Behavioral Intentions: Mediating Mechanisms of Perceived Organizational Performance and Corporate Reputation," Journal of Business Ethics, Springer, vol. 175(2), pages 361-389, January.
    4. Valentinetti, Diego & Flores Muñoz, Francisco, 2021. "Internet of things: Emerging impacts on digital reporting," Journal of Business Research, Elsevier, vol. 131(C), pages 549-562.
    5. Maria Daniela BONDOC & Marian TAICU, 2019. "Ethics In Financial Reporting And Organizational Communication," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 18(3), pages 168-174.
    6. Delia IANCU, 2019. "Comparative Analysis Of Fiscal Systems And Policies," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 18(3), pages 175-181.
    7. Tomasz L. Nawrocki & Danuta Szwajca, 2022. "The Importance of Selected Aspects of a Company’s Reputation for Individual Stock Market Investors—Evidence from Polish Capital Market," Sustainability, MDPI, vol. 14(15), pages 1-15, July.
    8. Nicolás Gambetta & Laura Sierra‐García & María Antonia García‐Benau & Josefina Novejarque‐Civera, 2023. "The Informative Value of Key Audit Matters in the Audit Report: Understanding the Impact of the Audit Firm and KAM Type," Australian Accounting Review, CPA Australia, vol. 33(2), pages 114-134, June.
    9. Camelia-Daniela Hategan & Ruxandra-Ioana Curea-Pitorac & Vasile-Petru Hategan, 2020. "Responsible Communication of Romanian Companies for Ensuring Public Health in a COVID-19 Pandemic Context," IJERPH, MDPI, vol. 17(22), pages 1-16, November.
    10. Akhilesh Bajaj & Lori N. K. Leonard & Li Sun & Zhenze Xing, 2023. "Corporate social responsibility and annual report reading difficulty," Review of Quantitative Finance and Accounting, Springer, vol. 60(4), pages 1393-1428, May.
    11. Bruce K. Behn & Francesca Rossignoli & Silvano Corbella, 2019. "Beyond financial reporting disclosures," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2019(2), pages 5-8.
    12. Chaoyuan She & Giovanna Michelon, 2023. "A governance approach to stakeholder engagement in sustainable enterprises—Evidence from B Corps," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5487-5505, December.
    13. Nicolás Gambetta & Laura Sierra García & María Antonia García Benau & Josefina Novejarque Civera, 2022. "The informative value of Key Audit Matters in the audit report," Documentos de Investigación 129, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.

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