Breuer, Wolfgang
[Verfasser:in]
;
Knetsch, Andreas
[Sonstige Person, Familie und Körperschaft];
Salzmann, Astrid Juliane
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 12, 2018 erstellt
Beschreibung:
This paper investigates whether managerial rhetoric in the Management Discussion & Analysis section of 10-K filings can help gauge the level of managerial opportunism in a firm. We find that the use of trust-related words is connected to inefficient investment decisions and poor operating performance. Furthermore, firms making more frequent use of trust-related words are subject to less monitoring by institutional investors or analysts. Their accounting also relies more heavily on discretionary accruals. These results are consistent with the notion that managerial rhetoric to advertise trustworthiness points towards agency problems plaguing the firm