THRILLED TO ANNOUNCE: LINGUISTIC DISCLOSURE TONE AS ANTICIPATORY IMPRESSION MANAGEMENT

Impression management scholars have provided rich insights into how firms, anticipating negative evaluations of strategic announcements, nudge outsiders' perceptions using anticipatory impression management (AIM). More recently, managerial research has turned to AIM's linguistic attributes, showing that not only the content but also linguistics influence stakeholder perception. We add to this evolving stream by incorporating strategic linguistic tone, the difference between firms’ baseline tone and their strategic announcement tone, into the AIM literature. While linguistic disclosure tone has been investigated widely in management-adjacent disciplines, both its role as an AIM tactic and its effect on investors’ evaluation of strategic announcements is underexplored. We develop and test theory on a sample of 1859 acquisition announcements conducted by S&P500 companies between 2010 and 2019. Our results show that firms’ linguistic disclosure tone in acquisition announcements is higher than the firm’s regular baseline tone. These findings indicate that firms expecting negative reactions to acquisition announcements, increase their linguistic disclosure tone to attenuate negative repercussions. However, higher tone levels tend to negatively affect investor evaluation of acquisitions unless the linguistic disclosure tone can be bolstered by more substantive signals of acquisition success.