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The Textual Tone of Annual Reports and Market Attention: Evidence From Chinese Listed Companies

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  • Yanyan Li

Abstract

This study examines how the textual tone of annual reports shapes market attention and investigates the moderating effect of firm profitability, firm size, and Tobin's Q. Based on a comprehensive sample of Chinese A‐share listed firms from 2007 to 2022, we find that a positive tone in annual reports significantly increases market attention. Moreover, firm profit strengthens this relationship, whereas firm size and Tobin's Q weaken it. These results suggest that the credibility and effectiveness of a positive tone are enhanced when corroborated by strong financial performance. Our findings remain robust to alternative variable measurements, endogeneity tests, and multiple sample specifications. This research contributes to signaling theory and impression management literature by identifying a critical boundary condition for the efficacy of tonal strategies, with important implications for investors, regulators, and corporate disclosure practices.

Suggested Citation

  • Yanyan Li, 2026. "The Textual Tone of Annual Reports and Market Attention: Evidence From Chinese Listed Companies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 47(6), pages 1321-1335, September.
    • Handle: RePEc:wly:mgtdec:v:47:y:2026:i:6:p:1321-1335
    DOI: 10.1002/mde.70100
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