Associate Professor of Strategy and Entrepreneurship
Joao Cotter Salvado
PhD Candidate, Strategy and Entrepreneurship
Recent years have witnessed a growing interest in understanding the role of language as a way to manage the perception of the stock market about organisational decisions. Accordingly, organisational research has examined how organisations influence investors’ response by framing their actions differently, i.e. selectively conveying certain preferred meanings and interpretations, while hiding others (Fiss & Zajac, 2006; Rhee & Fiss, 2014; Westphal & Zajac, 1998). Furthermore, accounting and behavioral finance research has examined how stock pricing responds to the use of particular language characteristics, such as tone (Henry, 2008; Huang, Teoh, & Zhang, 2014; Price, Doran, Peterson, & Bliss, 2012) or complexity (Hwang & Kim, 2017; Li, 2008; Loughran & McDonald, 2014) in companies’ disclosures. Overall, the precise choice of language has been reported to be able to moderate the stock market’s reaction to particular events or pieces of information.
With this project, we intend to explore CEO’s use of language in the communication of strategic innovation to the financial market. Our basic premise is that the effectiveness of different linguistic features will depend on the degree of innovativeness of the new strategy being presented.