Impression management in bankruptcyAn analysis of the narratives in listed companies

  1. Moreno, Alonso 1
  2. Camacho-Miñano, María-del-Mar 2
  1. 1 Universidad de Jaén, Jaén-SPAIN
  2. 2 Universidad Complutense de Madrid, Madrid-SPAIN
Revue:
Revista de contabilidad = Spanish accounting review: [RC-SAR]

ISSN: 1138-4891

Année de publication: 2024

Volumen: 27

Número: 1

Pages: 160-173

Type: Article

DOI: 10.6018/RCSAR.512151 DIALNET GOOGLE SCHOLAR lock_openDIGITUM editor

D'autres publications dans: Revista de contabilidad = Spanish accounting review: [RC-SAR]

Résumé

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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