Mixed emotions? Firm performance implications of tenor incongruent firm 10-K forms versus mass media reporting tenor
Michael Hadani, Michal StrahilevitzPurpose
This study aims to examine how incongruent emotional signals between firms’ 10-K filings and mass media coverage impact firm performance, addressing a gap in understanding the consequences of mismatched emotional cues in multi-source information environments.
Design/methodology/approach
Using data from S&P 1500 firms over 23 years (2000–2022), the authors use comparative textual analysis to measure the gap between the affective tenor of 10-K filings and contemporaneous and prior media coverage. Generalized method of moments regression analysis tests the effects of tenor incongruence on firm performance.
Findings
Incongruent tenor between 10-K filings and media coverage significantly affects firm performance, whether mass media is more positive or more negative than the firm’s tenor. Yet positive and negative tenor incongruencies exhibit asymmetrical associations with firm performance. The timing of media coverage relative to 10-K filings also influences outcomes.
Research limitations/implications
The study focuses on S&P 1500 firms; future research could examine firms under different regulatory environments and media systems. The findings suggest that temporal sequence matters in signal interpretation and that the source of signals interacts with emotional tenor to affect performance.
Practical implications
Managers should strategically align communication tones across channels and monitor media tenor timing relative to mandatory disclosures to mitigate negative performance impacts from signal incongruence.
Social implications
The research highlights how information transparency and consistency in corporate communications affect market efficiency and investor decision-making in increasingly complex media environments.
Originality/value
This research integrates signaling theory with agenda-setting theory to reveal how emotional cue misalignment across information channels creates valuation consequences, offering novel insights into multi-source information environments common today.