The Impact of Disclosure Delivery Mode on Investment Decisions and Investors’ Memories.

• In Event: Disclosure Medium Effects

Abstract

We examine whether disclosure delivery mode impacts’ the influence of managers’ strategic communications. Specifically, we examine whether investors who listen to a disclosure are more influenced by managers’ strategic narratives than investors who read a disclosure. We predict that managers’ strategic narratives have the ability to influence investors’ investment judgments by biasing their memories of the content in the disclosure in the direction of the strategic narrative, and that this effect is stronger when investors listen vs. read to the disclosure. We test our findings using an experiment. Results support our central research prediction and indicate that managers’ strategic narratives exert a larger impact on investment decisions when the disclosure delivery mode is oral vs. written. Our study suggests that the influence of managers’ strategic narratives may be heightened based on disclosure mode. Further, we are the first paper to study the role of investors’ memories of disclosures as a potential determinant of investors’ reactions to disclosures.

Authors

• Serena Loftus, Tulane University

• Wynter Brooke Elliott, University of Illinois-Urbana-Champaign

• Amanda Michelle Winn, University of Illinois-Urbana-Champaign