Do letters to shareholders inform or mislead? Insights from insider trading

Elena Beccalli, Saverio Bozzolan*, E. Laghi, Martino Mattei

*Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivistaArticolo in rivista


qualitative disclosures as useful because they have significant effects on analysts’ forecast revisions and a firm’s share price. But these results leave unanswered the question of whether managers write qualitative disclosures to inform or mislead investors. Based on the signaling theory, we consider two actions by the same manager: one (insider trading) is a costly signal whilst the other (qualitative disclosure) is the cheap signal. We then verify whether they are coherent. We investigate the content and the verbal tone of the Letter of Shareholders and the insider trading from its author before and after the letter’s date of release and find that the costly signal (the insider trading) is not coherent with the cheap signal (the disclosure). This finding indicates that managers do not use qualitative disclosures to offer incremental information but that they might use them to mislead investors
Lingua originaleEnglish
pagine (da-a)73-108
Numero di pagine36
Stato di pubblicazionePubblicato - 2018


  • Insider trading
  • impression management


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