Credibility Signals from Soft Information: Evidence from Investor Reactions to Tone in Earnings Conference Calls

Research assigns significant share price relevance to linguistic tone in earnings conference calls. Tone is, however, only one facet the mosaic of soft information that is disseminated interactive call setting. We argue investors exploit further aspects this simultaneously assess tone’s credibility. Drawing on communication literature, we focus role perceived sender and message credibility calls altering investor reactions tone. measure as trustworthiness originating from manager’s personality (i.e., Big 5 traits), characteristics a credible style structure. find corroborating evidence are stronger presence higher also effect be weaker environments, where expect reliance signals higher. Finally, strongly attenuate negative post-conference-call drift reaction Our results provide benefit considering when reacting