Drawing on theories from social judgment and persuasion, this chapter proposes that investors will be sensitive to the use of emotional language by top executives in their communication. In addition, the effect of emotional language on investors will depend on investors' prior beliefs about the firm. Using a sample of 8,990 transcripts of presentations by executives of 632 organizations at investor conferences between 2004 and 2010, results support the prediction that executives' use of emotional language has a significant influence on investors and that different ways of expressing emotion have differential effects on investor judgment. Moreover, the effect of emotional language is stronger when the firm's uncertainty level is high and growth prospect is low. The results provide insights into how organizations can use language strategically to manage their relationships with stock investors, thereby contributing to a growing literature on symbolic management of organization.
|Title of host publication||Communication and Language Analysis in the Corporate World|
|Number of pages||18|
|ISBN (Print)||1466649992, 9781466649996|
|Publication status||Published - 31 Jan 2014|
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Business, Management and Accounting(all)