| I contribute to a growing literature on the role of managers' language choices in financial reporting by studying whether managers' pronouns influence investor judgments and decisions. I study the impact of managers' use of I-statements and we-statements in spoken disclosures on investors' perceptions of manager credibility, which decompose into perceptions of manager competence and trustworthiness. I predict and find that investors perceive managers who use we-statements as more competent than managers who use I-statements, all else being equal. I also show that the presence of a past trust-violating event, like an earnings restatement, impacts investors' reactions to pronouns. When a trust-violating event has occurred, I predict and find evidence consistent with investors perceiving managers who use we-statements as less credible than managers who use I-statements. Overall, this study contributes to a literature on language and reputation repair by indicating that managers' use of pronouns influence both investors' reactions to a disclosure and perceptions of manager credibility following an earnings restatement. |
