Emotion Suppression in Firm Disclosures

• In Event: Disclosure Presentation Effects

Abstract

Emotional expressions convey information above and beyond the actual information content in an interaction. Motivated by firms’ desire to avoid unintentionally revealing information in disclosures, we study the effects of managers suppressing emotion in their vocal delivery. In our main experiment, we show that emotion suppression is effective, in that investors perceive disclosures as sounding less emotional when managers attempt to limit the emotion in their voices. However, we also show that attempting to suppress emotion in disclosures causes managers to sound less natural. In a supplemental experiment, we find that emotion suppression reduces perceptions of managers’ competence and trustworthiness—two important components of manager credibility. Our results suggest that managers’ efforts to limit emotion in their voices, a likely consequence of firms’ preparation for disclosures, may have unintended consequences. Our study contributes to the literature on the qualitative characteristics of disclosures and has practical implications for managers attempting to manage these characteristics.

Authors

• Kristina Rennekamp, Cornell University

• Blake Steenhoven, Cornell University

• Brian Joseph White, The University of Texas at Austin