Impression management in bankruptcy: An analysis of the narratives in listed companies
Managers tend to use opportunistically corporate narrative disclosure when financial performance is poor. However, there is little research on impression management in situations of extreme distress, such as bankruptcy. This paper analyzes ten textual characteristics of corporate reports at two mom...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universidad de Murcia
2024-01-01
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| Series: | Revista de Contabilidad: Spanish Accounting Review |
| Subjects: | |
| Online Access: | https://revistas.um.es/rcsar/article/view/512151 |
| _version_ | 1797361908914847744 |
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| author | Alonso Moreno María-del-Mar Camacho-Miñano |
| author_facet | Alonso Moreno María-del-Mar Camacho-Miñano |
| author_sort | Alonso Moreno |
| collection | DOAJ |
| description |
Managers tend to use opportunistically corporate narrative disclosure when financial performance is poor. However, there is little research on impression management in situations of extreme distress, such as bankruptcy. This paper analyzes ten textual characteristics of corporate reports at two moments in time, the last year just before entering the legal bankruptcy procedure (sick year) and five years earlier (healthy year). Specifically, it investigates the management reports of all bankrupt listed companies in Spain from 2005 to 2019. Our findings near bankruptcy only show behavior that may be compatible with impression management in relation to length and positive language. Litigation risk associated with bankruptcy may condition managers’ attitudes to using narratives in a self-serving manner. Our results are also robust if we only test the most financially distressed bankrupt companies. This paper contributes to the understanding of impression management in companies in conditions of extreme financial distress.
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| first_indexed | 2024-03-08T15:59:54Z |
| format | Article |
| id | doaj.art-cdf74959f4654940946600d46240a231 |
| institution | Directory Open Access Journal |
| issn | 1138-4891 1988-4672 |
| language | English |
| last_indexed | 2024-03-08T15:59:54Z |
| publishDate | 2024-01-01 |
| publisher | Universidad de Murcia |
| record_format | Article |
| series | Revista de Contabilidad: Spanish Accounting Review |
| spelling | doaj.art-cdf74959f4654940946600d46240a2312024-01-08T10:43:34ZengUniversidad de MurciaRevista de Contabilidad: Spanish Accounting Review1138-48911988-46722024-01-0127110.6018/rcsar.512151Impression management in bankruptcy: An analysis of the narratives in listed companiesAlonso Morenohttps://orcid.org/0000-0001-6374-2480María-del-Mar Camacho-Miñanohttps://orcid.org/0000-0001-5852-338X Managers tend to use opportunistically corporate narrative disclosure when financial performance is poor. However, there is little research on impression management in situations of extreme distress, such as bankruptcy. This paper analyzes ten textual characteristics of corporate reports at two moments in time, the last year just before entering the legal bankruptcy procedure (sick year) and five years earlier (healthy year). Specifically, it investigates the management reports of all bankrupt listed companies in Spain from 2005 to 2019. Our findings near bankruptcy only show behavior that may be compatible with impression management in relation to length and positive language. Litigation risk associated with bankruptcy may condition managers’ attitudes to using narratives in a self-serving manner. Our results are also robust if we only test the most financially distressed bankrupt companies. This paper contributes to the understanding of impression management in companies in conditions of extreme financial distress. https://revistas.um.es/rcsar/article/view/512151BankruptcyBusiness failureImpression managementLitigation riskNarratives |
| spellingShingle | Alonso Moreno María-del-Mar Camacho-Miñano Impression management in bankruptcy: An analysis of the narratives in listed companies Revista de Contabilidad: Spanish Accounting Review Bankruptcy Business failure Impression management Litigation risk Narratives |
| title | Impression management in bankruptcy: An analysis of the narratives in listed companies |
| title_full | Impression management in bankruptcy: An analysis of the narratives in listed companies |
| title_fullStr | Impression management in bankruptcy: An analysis of the narratives in listed companies |
| title_full_unstemmed | Impression management in bankruptcy: An analysis of the narratives in listed companies |
| title_short | Impression management in bankruptcy: An analysis of the narratives in listed companies |
| title_sort | impression management in bankruptcy an analysis of the narratives in listed companies |
| topic | Bankruptcy Business failure Impression management Litigation risk Narratives |
| url | https://revistas.um.es/rcsar/article/view/512151 |
| work_keys_str_mv | AT alonsomoreno impressionmanagementinbankruptcyananalysisofthenarrativesinlistedcompanies AT mariadelmarcamachominano impressionmanagementinbankruptcyananalysisofthenarrativesinlistedcompanies |