Impression Management in Corporate Reporting: The Impact of MD&A Textual Similarity on CSR Outcomes

This research explores the connection between the textual similarity of Management’s Discussion and Analysis (MD&A) sections in corporate reports and subsequent Corporate Social Responsibility (CSR) performance. Using a large sample of Chinese A-share listed firms from 2010 to 2021, the study finds a significant negative relationship. Firms exhibiting higher MD&A textual similarity indicating more repetitive narrative disclosures year after year—tend to show poorer future CSR outcomes. This suggests that companies may use repetitive narratives as a passive form of impression management to conceal weak CSR engagement. The analysis further shows that this effect is mediated by increased information asymmetry, proxied by analyst forecast dispersion. Repetitive disclosures create a less transparent information environment, weakening external monitoring and giving managers greater scope to reduce investment in substantive CSR activities. The study’s conclusions are supported by multiple robust empirical strategies, including instrumental variables and dynamic panel Generalized Method of Moments (GMM) estimations. These findings underscore the importance for stakeholders of scrutinizing narrative consistency in corporate reports as a potential indicator of superficial CSR efforts and a lack of genuine corporate accountability.