IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v65y2025i5p4328-4351.html

Motivations Behind Companies' Riding the Wave on Interactive Platforms: From the Perspective of Insider Share Reductions

Author

Listed:
  • Yaoyao Li
  • Tianmei Wang
  • Duo Tao
  • Qianhui Hou

Abstract

This study focuses on the ‘riding the wave’ behaviour of A‐share listed companies on interactive platforms, examining the motivations behind this behaviour from the perspective of insider share reductions. The findings indicate that the ‘riding the wave’ behaviour of companies significantly facilitates insider share reductions, confirming the motivation of companies to strategically disclose information on these platforms to facilitate share reductions. Mechanism analysis demonstrates that this ‘riding the wave’ leads to heightened investor sentiment and herding behaviour, ultimately enabling insider share reductions. Further research finds that when a company has stronger self‐serving motives, more internal reduction opportunities, and lower reduction costs, this effect becomes more pronounced. Additionally, we also find that companies mainly adopt a catering strategy, and that the effect of ‘riding the wave’ on insider share reductions is temporary and primarily driven by exaggerated disclosures. This paper sheds light on management's strategic information disclosure behaviour and its motivations within interactive communication settings, providing a scientific basis for regulators to enhance the regulatory framework for this novel disclosure channels.

Suggested Citation

  • Yaoyao Li & Tianmei Wang & Duo Tao & Qianhui Hou, 2025. "Motivations Behind Companies' Riding the Wave on Interactive Platforms: From the Perspective of Insider Share Reductions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(5), pages 4328-4351, December.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:5:p:4328-4351
    DOI: 10.1111/acfi.70065
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.70065
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.70065?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sarah McVay & Venky Nagar & Vicki Wei Tang, 2006. "Trading incentives to meet the analyst forecast," Review of Accounting Studies, Springer, vol. 11(4), pages 575-598, December.
    2. Kraft, Anastasia & Lee, Bong Soo & Lopatta, Kerstin, 2014. "Management earnings forecasts, insider trading, and information asymmetry," Journal of Corporate Finance, Elsevier, vol. 26(C), pages 96-123.
    3. Ke, Bin & Huddart, Steven & Petroni, Kathy, 2003. "What insiders know about future earnings and how they use it: Evidence from insider trades," Journal of Accounting and Economics, Elsevier, vol. 35(3), pages 315-346, August.
    4. Xu, Weidong & Luo, Zijun & Li, Donghui, 2024. "Investor–firm interactions and corporate investment efficiency: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 84(C).
    5. Stephan Hollander & Maarten Pronk & Erik Roelofsen, 2010. "Does Silence Speak? An Empirical Analysis of Disclosure Choices During Conference Calls," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 48(3), pages 531-563, June.
    6. Li, Yi & Zhang, Wei & Wang, Pengfei & Goodell, John W., 2024. "Social media as an amplifier of insider trading profits," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 96(C).
    7. Yonghai Wang & Qingyun Ye & Jenny Jing Wang & Yunqian Wang, 2023. "Earnings manipulation and similarity of annual report disclosure: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1137-1156, April.
    8. Duan, Lini & Li, Lingyi & Park, Kyung-Hye & Wu, Di, 2023. "Muddy the waters to conceal information? Evidence from firms' inconsistent answers during Q&As," Finance Research Letters, Elsevier, vol. 51(C).
    9. Kristian D. Allee & Matthew D. Deangelis, 2015. "The Structure of Voluntary Disclosure Narratives: Evidence from Tone Dispersion," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 53(2), pages 241-274, May.
    10. Wu, Di & Gao, Shenghao & Chan, Kam C. & Cheng, Xiaoke, 2022. "Do firms strategically respond to retail investors on the online interactive information disclosure platform?," Finance Research Letters, Elsevier, vol. 47(PA).
    11. Thomas Schleicher & Martin Walker, 2010. "Bias in the tone of forward‐looking narratives," Accounting and Business Research, Taylor & Francis Journals, vol. 40(4), pages 371-390.
    12. Qiang Cheng & Fei Du & Xin Wang & Yutao Wang, 2016. "Seeing is believing: analysts’ corporate site visits," Review of Accounting Studies, Springer, vol. 21(4), pages 1245-1286, December.
    13. Wenhan Xu & Di Qi, 2022. "Abnormal tone in management earnings forecast, media negative coverage, and insider trading," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 29(4), pages 939-963, July.
    14. Cheng, Lin & Jin, Qinglu & Ma, Hui, 2023. "Tone emphasis and insider trading," Journal of Corporate Finance, Elsevier, vol. 80(C).
    15. Cong, Yunyu & Sun, Fangfang & Wang, Fusheng & Ye, Qiang, 2022. "Information assimilation and stock return synchronicity: Evidence from an investor relations management platform," Emerging Markets Review, Elsevier, vol. 53(C).
    16. Rozeff, Michael S & Zaman, Mir A, 1988. "Market Efficiency and Insider Trading: New Evidence," The Journal of Business, University of Chicago Press, vol. 61(1), pages 25-44, January.
    17. Scott Duellman & Jun Guo & Yan Zhang & Nan Zhou, 2018. "Expertise Rents from Insider Trading for Financial Experts on Audit Committees," Contemporary Accounting Research, John Wiley & Sons, vol. 35(2), pages 930-955, June.
    18. Jonathan L. Rogers, 2008. "Disclosure Quality and Management Trading Incentives," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 46(5), pages 1265-1296, December.
    19. Brian J. Bushee & Ian D. Gow & Daniel J. Taylor, 2018. "Linguistic Complexity in Firm Disclosures: Obfuscation or Information?," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 56(1), pages 85-121, March.
    20. Michael S. Drake & Darren T. Roulstone & Jacob R. Thornock, 2012. "Investor Information Demand: Evidence from Google Searches Around Earnings Announcements," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 50(4), pages 1001-1040, September.
    21. Qiang Cheng & Kin Lo, 2006. "Insider Trading and Voluntary Disclosures," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 44(5), pages 815-848, December.
    22. Kezhi Liao & Zhihao Wang & Yu Zhang, 2025. "Minority Shareholder Activism and Debt Financing Costs: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(10), pages 2993-3021, August.
    23. Li, Feng, 2008. "Annual report readability, current earnings, and earnings persistence," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 221-247, August.
    24. David H. Solomon, 2012. "Selective Publicity and Stock Prices," Journal of Finance, American Finance Association, vol. 67(2), pages 599-638, April.
    25. Bozanic, Zahn & Roulstone, Darren T. & Van Buskirk, Andrew, 2018. "Management earnings forecasts and other forward-looking statements," Journal of Accounting and Economics, Elsevier, vol. 65(1), pages 1-20.
    26. Lee, Charles M.C. & Zhong, Qinlin, 2022. "Shall we talk? The role of interactive investor platforms in corporate communication," Journal of Accounting and Economics, Elsevier, vol. 74(2).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheng, Lin & Jin, Qinglu & Ma, Hui, 2023. "Tone emphasis and insider trading," Journal of Corporate Finance, Elsevier, vol. 80(C).
    2. Hongfei Ruan & Yongzhi Du & Yinju Nie & Yi Xiang, 2025. "Visual Expressions in Corporate Social Responsibility Reports: The Role of Minority Investors' Online Information Demand," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(3), pages 2895-2920, May.
    3. Xie, Nan & Xu, Qifa & Jiang, Cuixia & Yang, Shanlin, 2023. "The determinants and consequences of firms’ boilerplate answers: Evidence from online interactive platforms in China," Finance Research Letters, Elsevier, vol. 58(PD).
    4. Chen, Jean Jinghan & Song, Peiyang & Loi, Fai Lim, 2024. "Strategic forward-looking nonearnings disclosure and overinvestment," The British Accounting Review, Elsevier, vol. 56(6).
    5. Zhu, Jing & Zhang, Chen & Sun, Jiaojiao & Ding, Jiajun, 2025. "The impact mechanism of interactive carbon disclosure on firm value moderated by investors’ online social networks," Research in International Business and Finance, Elsevier, vol. 75(C).
    6. Beattie, Vivien, 2014. "Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework," The British Accounting Review, Elsevier, vol. 46(2), pages 111-134.
    7. Wang, Maobin & Ye, Tao & Chen, Yaxin, 2025. "Do firms opportunistically manipulate their responses to fake news on social media? Evidence from a natural experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    8. Devrimi Kaya & Christian Maier & Tobias Böhmer, 2020. "Empirische Kapitalmarktforschung zu Conference Calls: Eine Literaturanalyse [Empirical Capital Market Research on Conference Calls: A Literature Review]," Schmalenbach Journal of Business Research, Springer, vol. 72(2), pages 183-212, June.
    9. Blankespoor, Elizabeth & deHaan, Ed & Marinovic, Iván, 2020. "Disclosure processing costs, investors’ information choice, and equity market outcomes: A review," Journal of Accounting and Economics, Elsevier, vol. 70(2).
    10. Bhagwat, Vineet & Shirley, Sara E. & Stark, Jeffrey R., 2024. "Task-oriented speech and information processing," Journal of Banking & Finance, Elsevier, vol. 161(C).
    11. Peng Liang & Hasan Cavusoglu & Nan Hu, 2023. "Customers’ managerial expectations and suppliers’ asymmetric cost management," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1975-1993, June.
    12. Zeckhauser, Richard, 2017. "Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls," Working Paper Series rwp17-017, Harvard University, John F. Kennedy School of Government.
    13. Xiaoyue Song & Junrui Zhang & Junqin Sun, 2025. "The Dark Side of Minority Shareholder Activism on R&D Investment: Perspective of Managers' Pressure Perception," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(7), pages 3820-3848, October.
    14. Guan, Kaolei & Fu, Mengting & Zhu, Haining, 2024. "Opportunistic behaviour behind corporate digitalization disclosure: The moderating role of economic policy uncertainty," Finance Research Letters, Elsevier, vol. 66(C).
    15. Farzamfar, Arshia & Foroughi, Pouyan & Hamisheh Bahar, Hosein & Ng, Lilian, 2024. "Illuminating the murk: The effect of business complexity on voluntary disclosure," Journal of Corporate Finance, Elsevier, vol. 87(C).
    16. Kristian D. Allee & Matthew D. Deangelis & James R. Moon, 2018. "Disclosure “Scriptability”," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 56(2), pages 363-430, May.
    17. Wang, Yang & Chen, Xin & Zhang, Yifei, 2025. "Management tone and corporate information asymmetry in times of pandemic crisis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 59(C).
    18. George P. Gao & Qingzhong Ma & David T. Ng & Ying Wu, 2022. "The Sound of Silence: What Do We Know When Insiders Do Not Trade?," Management Science, INFORMS, vol. 68(7), pages 4835-4857, July.
    19. Huang, Wan & Bai, Yufan & Luo, Hong, 2024. "Customer identity concealing and insider selling profitability: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 85(C).
    20. Umar, Tarik, 2022. "Complexity aversion when SeekingAlpha," Journal of Accounting and Economics, Elsevier, vol. 73(2).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:65:y:2025:i:5:p:4328-4351. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.