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From bottom line to consumers’ mind: The framing effects of accounting information

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  • Tian, Yan
  • Zhou, Hui

Abstract

We investigate how accounting information and message framing jointly impact consumer choice between brand name and generic drugs using a sample representative of the U.S. adult population. We find that information about manufacturers’ profit margin/cost profile in different frames predisposes consumers to develop more or less favorable attitudes towards the firms and their products. The results suggest that two important accounting constructs (profit margin and cost) are endowed with a descriptive valence that evokes affective responses in consumers’ associative memory. This study adds to earlier work on the role of accounting information’s connotative meaning in shaping user perceptions by providing new evidence that the descriptive valence of accounting constructs can impact consumer purchase decisions. The findings of this study also have direct implications for efforts aimed at reducing health care costs by promoting wider use of generic drugs.

Suggested Citation

  • Tian, Yan & Zhou, Hui, 2015. "From bottom line to consumers’ mind: The framing effects of accounting information," Accounting, Organizations and Society, Elsevier, vol. 43(C), pages 56-66.
    • Handle: RePEc:eee:aosoci:v:43:y:2015:i:c:p:56-66
    DOI: 10.1016/j.aos.2015.04.003
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    References listed on IDEAS

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    Cited by:

    1. Shafu Zhang & Like Jiang & Michel Magnan & Lixin Nancy Su, 2021. "Dealing with Ethical Dilemmas: A Look at Financial Reporting by Firms Facing Product Harm Crises," Journal of Business Ethics, Springer, vol. 170(3), pages 497-518, May.
    2. Nejat Anbarci & Nick Feltovich, 2018. "Pricing in Competitive Search Markets: The Roles of Price Information and Fairness Perceptions," Management Science, INFORMS, vol. 64(3), pages 1101-1120, March.
    3. Teodor HADA & Nicoleta BARBUTA-MISU & Teodora Maria AVRAM, 2016. "Financial CEMATT Method: a New Approach for Performance Assessment using Accounting Information," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 10-17.
    4. Madaleno Mara & Bărbuţă-Mişu Nicoleta, 2019. "The Financial Performance of European Companies: Explanatory Factors in the Context of Economic Crisis," Ekonomika (Economics), Sciendo, vol. 98(2), pages 6-18, December.
    5. Like Jiang & Michel Magnan & Lixin (Nancy) Su & Shafu Zhang, 2018. "Damage Control: Earnings Management by Firms Facing Product Harm Crises," CIRANO Working Papers 2018s-01, CIRANO.

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