Opportunistic Disclosure in Press Release Headlines

Accounting and Business Research, 2012

45 Pages Posted: 14 Oct 2011

See all articles by Encarna Guillamon Saorin

Encarna Guillamon Saorin

Universidad Carlos III de Madrid

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration; European Corporate Governance Institute (ECGI)

Michael John Jones

affiliation not provided to SSRN

Date Written: October 13, 2011

Abstract

This paper examines managerial, self-serving, disclosure practices in the headlines of press releases announcing annual results. Headlines are a framing feature that can be used to capture and retain attention with the ultimate intention of affecting the thoughts and feelings of readers, influencing their opinions. Therefore, headlines have a key role in a company’s communication strategy. Using a large sample of Spanish listed companies for the years 2005 and 2006, we provide evidence of persistent impression management in press release headlines. Companies, irrespective of whether they perform well or badly, are inclined to stress good news and downplay bad news. Companies with very small profits report surprising amounts of good news. We provide evidence that companies are selective in the performance figures they include in the headlines of press releases. In particular, the disclosure of profits or sales figures in press release headlines is also associated with earnings performance. Finally, we find that larger firms are more likely to issue press releases than smaller ones, consistent with the theory that highly visible firms face a greater demand for information transparency.

Keywords: headlines, impression management, opportunistic disclosure, press releases, prominence, voluntary disclosure

JEL Classification: M40, D82, G30

Suggested Citation

Guillamon Saorin, Encarna and Garcia Osma, Beatriz and Jones, Michael John, Opportunistic Disclosure in Press Release Headlines (October 13, 2011). Accounting and Business Research, 2012, Available at SSRN: https://ssrn.com/abstract=1943569

Encarna Guillamon Saorin (Contact Author)

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Michael John Jones

affiliation not provided to SSRN ( email )

No Address Available

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