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The purpose of this research paper is to study attitudinal responses to the tone of a voluntary disclosure. It is known that tone can affect market response. Existing literature assumes that investors' attitudes mediate these effects, but these attitudinal mediators have not been directly measured. The authors are especially interested in cases where a firm is reporting poor financial results. The purpose is to trace the mechanism and conditions under which tone affects the credibility of a voluntary disclosure.

The authors conducted a 2 × 2 between-subjects study that manipulates financial performance (good/bad) and tone (positive/negative). The attitudinal dependent variable is the credibility of the management discussion, with persuasive intent as a mediator of the effects of tone on credibility.

In the case of bad financial results, a positive tone has a negative effect on credibility as the authors predict. This effect is fully mediated by perceived “persuasive intent”. In the case of good financial performance, credibility is higher when management adopts a positive tone, even though there, too, subjects perceive the persuasive intent.

The research paper establishes a bridge between the communications and finance literature on the effect of tone in voluntary disclosures. The empirical findings provide initial evidence and new detail regarding an attitudinal response (credibility) that the finance literature often assumes is responsible for mediating market responses to voluntary disclosures. One unexpected finding with interesting implications is that positive tone increases credibility in the case of good news. The implication is that a firm may indulge in taking a victory lap to celebrate good news, without harming the credibility of their corporate communications. Additional research is warranted that combines theory and methods from communications and finance, to further elaborate the attitudinal mechanisms behind the market effects of tone in voluntary disclosures.

At the most general level, the original contribution is the creation of a theoretical and methodological bridge between the communications and finance literature, regarding the effect of tone in voluntary disclosures. This research proposes an integrated theoretical framework, in which the concept of incentives shapes the relationships between the firm's financial situation, a disclosure's tone and its credibility. Methodologically, the authors employ an experimental method, which is more typical in the communications literature, to illuminate the attitudinal effects of tone that are frequently mentioned and assumed in the finance literature.

Recent evidence suggests that leaders' communication is central to an organization's success. The purpose of the current research is to examine how the leader's motivating language (direction giving, empathetic and meaning-making) translates into positive career outcomes through the mechanism of positive affective tone.

A three-wave time-lagged research design was applied to collect data (N = 320) from employees of the telecom sector of Pakistan.

Employing structural equation modeling (SEM) analysis, the study results indicate that high levels of leader's motivating language (direction giving and meaning-making) result in positive affective tone in employees, which further creates career motivation (career insight, career resilience and career identity) and career satisfaction. In contrast, positive affective tone does not mediate between empathetic language and career motivation (career insight, career resilience and career identity) and career satisfaction relationship.

The present study's findings explicate the unique effects and mechanism through which leaders motivating language becomes influential in reaping its benefits for followers' career outcomes. More research is warranted to examine other attitudinal and behavioral outcomes of leaders motivating language. This study research prepares future researchers to investigate other mediators and moderators in the leaders motivating language–career outcomes relationship. The authors recommend further implications of the study's findings for research and practice in the domain of leadership, affect and careers.

The current study opens up a new perspective in leaders motivating language literature by examining the underlying mechanism of positive affective tone.

This study examines the association between firm profitability and the “voice” of the CEO measured through tones they convey in their annual letter to shareholders. The paper examines whether the tones corresponds to a firm's profitability and the extent to which CEO tone varies with changes in profitability.

The authors analyze 187 Australian CEOs communications in 748 annual letters to their shareholders between 2010 and 2013. Two-word lists created by previous researchers are used to assess tones for their positive-negative plurality, uncertainty and use of modal words. Firm profitability is identified using return on assets. The authors examine the relationship between profitability and tones using simple ANOVA as well as a linear mixed model and then a change (differences) model. The change model captures any inertia or genre effect in the CEO letter to shareholders.

Using both the level and change model, the authors find that firm profitability is associated with CEO's tones that are more optimistic and less pessimistic. The authors also find that the use of negative words has more communicative value than positive words or “net” positive words. The authors also observe some genre effect when CEOs use strong modal words.

The sample is restricted to a selection of Australian firms that had the same CEO for the fiscal years 2010–2013; which reported in each financial year and which survived the global financial crisis. Generalizing the findings to other periods, types of firms, or to CEOs with shorter tenure, might be questionable. This study was conducted in Australia, which may limit the applicability of the findings to other jurisdictions.

The significant link between firm profitability and CEOs' use of positive, net positive and negative words implies that investors may place reliance on the use of these tones in the CEO's annual letter to accurately reflect the profitability of the firm.

The study extends the existing literature by examining whether a change in firm profitability is linked to a change in CEO tone. It concludes that even in periods of general financial stress, shareholders should be confident that CEOs' letters to shareholders provide credible information that corresponds to firm performance.

The authors investigate the impact of disclosure tones and financial risk on the readability of annual reports in the banking sector. The authors also examine the moderating effect of banks' financial risk on the tone–readability relationship.

This study relies on the agency theory and the social psychology theory to formulate its testable hypotheses and explain the empirical findings. It uses a sample of 390 bank-year observations from banks listed in the Gulf Cooperation Council (GCC) Stock Exchanges during the period 2014–2019. It also employs random effect regressions to analyze the data and to examine the reverse causality/endogeneity in order to obtain robust findings.

This study’s results demonstrate that easy (difficult) to read annual reports is significantly associated with positive (negative) tone. Bank managers characterized as “too positive/optimistic” and banks with higher financial risks publish less readable annual reports. The results also show that the interaction between negative tone and a bank's financial risk is inversely associated with reading difficulty, indicating that managers prepare easy text to clarify causes of their banks’ high risks, yet they communicate this easy text with a negative tone that reflects their feelings/emotions towards the financial risks of their banks.

This study’s findings call for the use of a plain English text that bears a neutral tone and urge financial analysts to go beyond the financial aspects of annual reports. They also stimulate policymakers to draft policies, which ensure the presence of audit committee members who possess a broad expertise to uncover the linguistic issues embedded in the annual reports.

To the best of the authors' knowledge, this is the first study dedicated to exploring the tone–readability association in the GCC's banking sector.

The purpose of this paper is to show how store positive affective tone predicts store performance (i.e. sales achievement) through creativity, and how store negative affective tone enhances the relationship between positive affective tone and creativity.

A sample of 94 stores of a Brazilian retail chain is used to test the model. Store supervisors reported (October 2011) the store's affective tone and creativity relative to the last six months. Three periods are considered for measuring performance: the last six months (May to October 2011), the preceding four months (January to April 2011), and the subsequent semester (November 2011 to April 2012).

The main findings are: positive affective tone predicts the stores’ performance through the mediating role of creativity, even after controlling the effects of preceding stores’ performance; negative affective tone makes the relationship between positive affective tone and creativity stronger.

The paper empirically validates theory suggesting that creativity may be a source of retail stores’ competitive advantage, and shows that fostering positive affective tone may be a pathway to promote creativity. The paper also suggests that negative affective tone is not necessarily a “problem”; rather, it can be used to enhance the favorable impact of positive affective tone upon creativity. These are important contributions for the retailing literature, considering that creativity (mainly at the team and organizational level) in that field is understudied. It is also an important contribution to the literature on the services sector, in which research on creativity is scarce.

This study aims to provide evidence on the association between abnormal tone and audit fees, as well as between abnormal tone and audit report lag.

This study uses a fixed-effects model to examine the relationship between abnormal positive tone and audit engagement (audit fees and audit report lag). Following Blanco et al., the authors used propensity score matching to examine the robustness of the findings.

Abnormal positive tone affects the audit process. An abnormal positive tone in annual reports is associated with greater audit effort and higher audit fees.

This study contributes to the determinants of audit fees and audit lag by analyzing the impact of an abnormal positive tone on audit engagement. The literature analyzing the determinants of audit engagement often focuses on the quality of non-textual information. This study analyzes the impact of the quality of textual information (measured by abnormal tone) on audit engagement, which provides evidence of the association between textual disclosure and audit.

Although the literature has somewhat discussed social capital and knowledge sharing, the mediating and moderating mechanisms that influence team workers to move from connecting with one another to building social capital and consequently engaging in knowledge sharing still remain largely understudied. For that reason, this study aims to develop a holistic research framework that links social capital to knowledge sharing with positive affective tone as a mediator and hypercompetition as a moderator.

Drawing upon the social capital theory and the affective events theory (AET), this study proposes a research framework to assess how social capital factors influence knowledge sharing with the mediation of positive affective tone and the moderation of hypercompetition in high-tech teams. This study obtains survey data based on 330 questionnaires of working professionals from 66 high-tech teams in Taiwan, in which each team comprises four members and their team leader.

The empirical results of this study show that social interaction, shared vision and trust are positively related to knowledge sharing via the mediation of positive affective tone. Moreover, hypercompetition has positive moderating effects on the relationships between social interaction and positive affective tone as well as between trust and positive affective tone.

This study expands the previous literature to study through what mediating mechanism the effects of different social capital factors on knowledge sharing can be effectively realized and whether there exists any critical moderator that influences these effects.

This paper aims to examine the effect of a supervisory support climate on frontline employees’ service-oriented organizational citizenship behavior (OCB) using a multilevel conceptual model. A positive group affective tone – a meaningful construct – is introduced to investigate the mediating and moderating roles in this relationship in the context of hospitality.

Data were collected from 41 international tourist hotels in Taiwan. A total of 476 valid questionnaires from frontline employees were received for data analysis. The results were analyzed by using hierarchical linear modeling (HLM).

These results not only indicate that a supervisory support climate has a positive effect on service-oriented OCB but also reveal that a positive group affective tone partially mediates and notably interacts with the relationship between the supervisory support climate and service-oriented OCB.

Based on the results, this study recommends that hotels train their managers to build a supervisory support climate, because this is the key source of service-oriented OCB in frontline employees. In addition, hotel managers need to exert a positive group affective tone to reinforce the effect of a supervisory support climate on service-oriented OCB.

This study contributes to the current hospitality literature by verifying the effect of a supervisory support climate on service-oriented OCB from a multilevel perspective. It also extends the understanding of the mechanism and interaction effect of the positive group affective tone in this multilevel relationship.

This study aims to examine whether the disclosure tone in earnings announcements is related to a firm’s corporate social responsibility (CSR) performance.

Considering the lower likelihood of earnings management conducted by CSR-conscious firms, and the significant market impact of the tone of disclosure in the earnings announcements, the study investigates whether firms with good CSR performance attempt to influence investors’ judgements through “soft information” and, thus, produce earnings announcements with more positive tone. Specifically, it examines whether CSR performance is positively related to the optimistic disclosure tone in earnings announcements.

The study finds that more socially responsible firms exhibit a more optimistic tone in earnings announcements. The findings are robust to a variety of sensitivity tests and data from different years. Furthermore, the study finds that the positive association between CSR performance and disclosure tone in the earnings announcement is particularly apparent in the manufacturing industry.

This study contributes to the literature in multiple ways.

These findings should assist regulators in better understanding the verbal components in earnings announcements.

It is possible that firms might opportunistically engage in CSR activities to enhance their social image to exaggerate financial performance and influence investors’ 2019 decisions.

These results show that CSR performance is positively associated with the optimistic tone in earnings announcements. The findings are consistent with two alternative interpretations. First, even though CSR-conscious firms are unlikely to engage in earnings management, they may engage a more subtle form of impressions/tone management. Second, firms with better CSR performance may have better financial performance, and thus are more confident and optimistic, resulting in a more positive tone in their earnings announcements. As the study controls for financial performance and find a positive relation between CSR concerns and optimism in earnings announcements, it favors the previous explanation.

This paper examines whether and how customers' annual report tone affects suppliers' innovation decisions.

Using the data from disclosed information on top five customers and annual report tone by Chinese listed firms, this paper used a two-way fixed effect model and intermediary effect model tests to explore the impact of customers' annual report tone on suppliers' innovation decisions.

The results indicate that the more positive the tone of customer annual reports is, the higher the suppliers' technological innovation level. The customers' annual report tone affects suppliers' innovation decisions through alleviating financing constraints and reducing the bullwhip effect. In addition, the authors find that the worse the supplier's bargaining power and the higher the customer's media coverage, the more significant the impact of positive customer annual report tone on the level of corporate technological innovation.

For downstream customers, to improve the quality of their text information disclosure. For upstream suppliers, the tone of customers' annual reports has incremental information, so the attention to customers' text information should be strengthened. As far as the market is concerned, it is recommended that regulators should strictly require the quality of text information disclosure and introduce relevant penalty mechanisms better to regulate the quality of corporate text information disclosure.

To the best of the author's knowledge, this paper is the first to expand the research related to textual information from a supply chain innovation perspective. The textual information can provide incremental information, and spillover effects may occur among supply chains, affecting suppliers' innovation decisions. And it clarifies the specific mechanism by which the supply chain tone spillover effect affects corporate innovation, enriching the relevant research on supply chain influence mechanisms.