Does managerial tone matter for stock liquidity? Evidence from textual disclosures  

Dang, M., Puwanenthiren, P., Henry, D., Mieszko, M. and Toan, N.M. 2022. Does managerial tone matter for stock liquidity? Evidence from textual disclosures  . Finance Research Letters. 48 102917. https://doi.org/10.1016/j.frl.2022.102917

TitleDoes managerial tone matter for stock liquidity? Evidence from textual disclosures  
TypeJournal article
AuthorsDang, M., Puwanenthiren, P., Henry, D., Mieszko, M. and Toan, N.M.
Abstract

This study investigates the effect of managerial tone on stock liquidity using a sample of U.S.-listed firms over the 1994-2019 period. We find that firms with SEC filings exhibiting more positive managerial tone experience higher stock liquidity. Our findings remain unchanged after controlling for firm fixed effects, propensity score matching, and using alternative variable approaches. Further, we identify that the relationship is less pronounced during times of high policy uncertainty measured by EPU and presidential elections. Overall, this paper provides evidence that the management tone in SEC filings has price discovery and efficiency implications for investor trading decisions.

KeywordsManagement tone
textual disclosures
stock liquidity
policy uncertainty
propensity score matching
Article number102917
JournalFinance Research Letters
Journal citation48
ISSN1544-6123
1544-6131
Year2022
PublisherElsevier
Accepted author manuscript
License
CC BY-NC-ND 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1016/j.frl.2022.102917
Publication dates
Published25 Apr 2022

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