The Capital Market Consequences of Language Barriers in the Conference Calls of Non-U.S. Firms
| Autor: | Gwen Yu, Francois Brochet, Patricia L. Naranjo |
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| Rok vydání: | 2016 |
| Předmět: | |
| Zdroj: | The Accounting Review. 91:1023-1049 |
| ISSN: | 1558-7967 0001-4826 |
| Popis: | We examine how language barriers affect the capital market reaction to information disclosures. Using transcripts from non-U.S. firms' English-language conference calls, we find that the calls of firms in countries with greater language barriers are more likely to contain non-plain English and erroneous expressions. For non-U.S. firms that hire an English-speaking manager, we find less use of non-plain English and fewer erroneous expressions. Calls with a greater use of non-plain English and more erroneous expressions show lower intraday price movement and trading volume. The capital market responses to non-plain English and erroneous expressions are more negative when the firm is located in a non-English-speaking country and has more English-speaking analysts participating in the call. Our results highlight that, when disclosure happens verbally, language barriers between speakers and listeners affect its transparency, which, in turn, impacts the market's reaction. |
| Databáze: | OpenAIRE |
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