Events

Prof. Helen Hu
Professor of Strategic Management
University of Melbourne

This study investigates how Chinese listed firms may use earnings conferences for the purpose of anticipatory impression management (AIM) to proactively build a positive image before the disclosure of financial misconduct. The specific event timeline—after committing financial misconduct but prior to regulators’ misconduct announcement—allows us to predict whether the focal firm uses earnings conferences as an AIM tactic. Additionally, the number of earnings conferences will increase with the severity of the misconduct. Moreover, we unfold the mechanism that shapes the qualitative information delivered through AIM conferences, with a particular emphasis on casting, i.e., the attendance of independent directors. This casting depends on the independent directors’ AIM value for the focal firm and their monitoring capabilities in detecting financial misconduct. Lastly, we posit that AIM conferences will buffer investors’ perceptions of negative events, positively influencing market reactions to misconduct announcements. Drawing on data from all Chinese-listed firms that committed financial misconduct from 2016 to 2020, we identified 122 AIM conferences and provided evidence for our hypotheses.