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Opportunistic disclosure in press release headlines

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  • Encarna Guillamon-Saorin
  • Beatriz García Osma
  • Michael John Jones

Abstract

This paper examines managerial, self-serving, disclosure practices in the headlines of press releases announcing annual results. Headlines are a framing feature that can be used to capture and retain attention with the ultimate intention of affecting the thoughts and feelings of readers, thus influencing their opinions. Therefore, headlines have a key role in a company's communication strategy. Using a large sample of Spanish listed companies for the years 2005 and 2006, we provide evidence of persistent impression management in press release headlines. Companies, irrespective of whether they perform well or badly, are inclined to stress good news and downplay bad news. Companies with very small profits report surprising amounts of good news. We provide evidence that companies are selective in the performance figures they include in the headlines of press releases. In particular, the disclosure of profits or sales figures in press release headlines is also associated with earnings performance. Finally, we find that larger firms are more likely to issue press releases than smaller ones, consistent with the theory that highly visible firms face a greater demand for information transparency.

Suggested Citation

  • Encarna Guillamon-Saorin & Beatriz García Osma & Michael John Jones, 2012. "Opportunistic disclosure in press release headlines," Accounting and Business Research, Taylor & Francis Journals, vol. 42(2), pages 143-168, June.
    • Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:143-168
    DOI: 10.1080/00014788.2012.632575
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    Citations

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    Cited by:

    1. Dunne, Neil J. & Brennan, Niamh M. & Kirwan, Collette E., 2021. "Impression management and Big Four auditors: Scrutiny at a public inquiry," Accounting, Organizations and Society, Elsevier, vol. 88(C).
    2. Qian Wang & Duowen Wu & Lina Yan, 2021. "Effect of positive tone in MD&A disclosure on capital structure adjustment speed: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5809-5845, December.
    3. Sebastian Kaumanns, 2019. "“Some fuzzy math”: relational information on debt value adjustments by managers and the financial press," Business Research, Springer;German Academic Association for Business Research, vol. 12(2), pages 755-794, December.
    4. Yang, Ann Shawing, 2020. "Misinformation corrections of corporate news: Corporate clarification announcements," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    5. Jessica H. Yang & Siwen Liu, 2017. "Accounting narratives and impression management on social media," Accounting and Business Research, Taylor & Francis Journals, vol. 47(6), pages 673-694, September.
    6. Kanbaty, Majid & Hellmann, Andreas & He, Liyu, 2020. "Infographics in corporate sustainability reports: Providing useful information or used for impression management?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    7. Eddy Cardinaels & Stephan Hollander & Brian J. White, 2019. "Automatic summarization of earnings releases: attributes and effects on investors’ judgments," Review of Accounting Studies, Springer, vol. 24(3), pages 860-890, September.
    8. Jason V. Chen & Kurt H. Gee & Jed J. Neilson, 2021. "Disclosure Prominence and the Quality of Non‐GAAP Earnings," Journal of Accounting Research, Wiley Blackwell, vol. 59(1), pages 163-213, March.
    9. Cardinaels, Eddy & Hollander, Stephan & White, Brian, 2019. "Automatic summarization of earnings releases : Attributes and effects on investors’ judgments," Other publications TiSEM 721f64f4-033e-453b-a3e7-2, Tilburg University, School of Economics and Management.
    10. Hyeon, Jiwon & Cho, Hyunkwon & Lee, Joonil, 2024. "Do Firms Strategically Use Non-Earnings Press Releases," Finance Research Letters, Elsevier, vol. 63(C).
    11. Saverio Bozzolan & Giovanna Michelon & Marco Mattei & Andrea Giornetti, 2019. "Signing the letter to shareholders: Does the Signatory?s role relate to impression management?," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2019(1), pages 37-82.
    12. Brennan, Niamh M. & Edgar, Victoria C. & Power, Sean Bradley, 2022. "COVID-19 profit warnings: Delivering bad news in a time of crisis," The British Accounting Review, Elsevier, vol. 54(2).

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