Differential Communication and Local Information Advantage: Revelations from Translation Differences

• 成果类型: Article
• 署名作者: Lang, Tina; Stice-Lawrence, Lorien; Wong, Yu Ting Forester; Wong, T. J.
• 署名单位: California State University System; California State University East Bay; University of Southern California; City University of Hong Kong
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2023-0274
• 发表日期: 2026-07
• 页码: 353-386
• 关键词: differential communication; local information advantage; translation differences; Financial disclosure; GLOBALIZATION; Textual analysis; ai; earnings management; corporate governance; Foreign investors; disclosure; FIRMS; performance; liquidity; MARKET; CHINA; connections

摘要

We develop an empirical proxy for companies' differential communication to local and foreign investors using translation differences in public disclosure. We validate our proxy using a field experiment and then use this proxy to document that differential communication is associated with increases in information asymmetry between local and foreign investors. It is also linked to decreases in the relative information quality of foreign analysts, even when foreign demand for information is high and communication costs are low. These and a variety of supporting tests, including those using an alternative artificial intelligence (AI)-based measure of translation differences, suggest that firms engage in differential communication because of a preference for local investors and when responding to incentives to maximize stock price. This study highlights the role of differential communication as one driver of local information advantage in our setting.