Moral foundations and financial performance : the effect of moral cues during times of earnings uncertainty
Purpose: This paper aims to investigate whether cues of morality can mitigate stock sell-offs in the face of earnings uncertainty prior to earnings conference calls and draws on moral foundations theory to study the effect of universal moral cues (harm/care and fairness/reciprocity rhetoric) and primarily conservative moral cues (ingroup/loyalty, authority/respect and purity/sanctity rhetoric) on market performance. Design/methodology/approach: The study relies on a longitudinal data set of 1,920 firm-quarter observations corresponding to calls held by firms listed on the S&P 500 in 2015 and relies on computer-assisted-text-analysis and event-study methodology to test hypotheses. Findings: The results suggest that cues of universal moral foundations have a mitigating effect on stock sell-offs and are able to create firm value; while cues primarily conservative moral foundations are not found to have an effect on market performance. Originality/value: This investigation highlights why earnings conference calls may serve as a valuable tool for communicating a firm’s moral inclination and why universal morality may appeal to a wider range of shareholders than primarily conservative morality.
Year of publication: |
2021
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Authors: | Jancenelle, Vivien E. |
Published in: |
International Journal of Organizational Analysis. - Emerald, ISSN 1934-8835, ZDB-ID 2435914-2. - Vol. 30.2021, 2 (14.01.), p. 207-222
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Publisher: |
Emerald |
Saved in:
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