The Effects of Company Image and Communication Platform Alignment on Investor Information Processing

44 Pages Posted: 26 Aug 2015 Last revised: 8 Mar 2021

See all articles by Ryan Guggenmos

Ryan Guggenmos

SC Johnson Graduate School of Management; Cornell SC Johnson College of Business

G. Bradley Bennett

University of Massachusetts Amherst - Isenberg School of Management

Date Written: February 2021

Abstract

Motivated by firms’ increasing use of new media technology for investor communications, we investigate how alignment between company image and communication platform affects investor judgment and decision making. In our first experiment, we demonstrate that investors expect alignment between firm image and the perception of the new media communication platform managers choose for investor relations. In a second experiment, we examine how this alignment affects investor judgment and decision making. We predict and find that greater platform-image alignment leads investors to experience subjective ease of processing, but does not change investment amounts. Additionally, we demonstrate an approach to conducting an explicit test of a null hypothesis by evaluating the convergence of null hypothesis significance testing (NHST) and Bayesian methods. Our findings have implications for researchers, firms, and investors and add to a growing literature on new media disclosure.

Keywords: social media; financial disclosure; conceptual fluency; Bayesian data analysis

JEL Classification: G10, G38, M41

Suggested Citation

Guggenmos, Ryan and Bennett, George Bradley, The Effects of Company Image and Communication Platform Alignment on Investor Information Processing (February 2021). Available at SSRN: https://ssrn.com/abstract=2650169 or http://dx.doi.org/10.2139/ssrn.2650169

Ryan Guggenmos

SC Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

George Bradley Bennett (Contact Author)

University of Massachusetts Amherst - Isenberg School of Management ( email )

Amherst, MA 01003-4910
United States

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