How Disclosure Medium Affects Investor Reactions to CEO Bragging, Modesty, and Humblebragging.

• In Event: Disclosure Medium Effects

Abstract

We examine if investor expectations of two common disclosure mediums (conference calls and Twitter) interact with a CEO’s communication style to influence investor judgments. Consistent with theory, results show that when the disclosure medium is a conference call, investors are more willing to invest when the CEO brags about positive firm performance compared to when the CEO is modest. In contrast, when the disclosure medium is Twitter, investors are less willing to invest when the CEO brags about positive firm performance compared to when the CEO is modest. Further analysis reveals that CEO credibility mediates the influence of a CEO’s communication style and disclosure medium on investor judgments. Additionally, we find that regardless of the disclosure medium, investors are less willing to invest in a firm when the CEO humblebrags about positive firm performance relative to when she brags or is modest. Our study contributes to the emerging literature on social media and disclosures, and to the literature investigating how style features of disclosures influence investor judgments. Our results also have practical implications for firms and managers developing communication strategies for new disclosure mediums like Twitter.

Authors

• Stephanie Grant, University of Washington

• Frank Hodge, University of Washington

• Roshan Sinha, University of Washington