Impact of Information in Press Releases on the Financial Performance of Russian Companies

When publishing press releases on earnings, a company can either reliably disclose additional information, or mislead the investor, hiding or, conversely, embellishing the facts. In this study, the authors assess the impact of the press release tone on a company’s financial performance. The empirical base of the study includes quarterly financial indicators of Russian companies as well as semantic, linguistic and substantive features of quarterly press releases (in English and Russian)for 2015–2019. As part of this work, to assess the impact of disclosing a company’s prospects in press releases on its financial results, an authors’ dictionary was created, designed as a library in the R environment; the final list consists of 373 words. The positive and negative coloring of the text in English was assessed by two dictionaries, namely Loughran and McDonald (LM), and Mohammad and Turney (NRC); the assessment of the sentiment of press releases in Russian was assessed by EcSentiThemeLex dictionary for assessing economic and financial texts; and complexity of the text was graded via the Bog Index. Panel regression was used to assess the impact of financial and textual factors on a company’s financial performance. It was found that press releases are getting longer, accompanied by comments from managers and, in general, becoming more meaningful. As far as managers are concerned, domestic managers fairly truthfully consecrate real information about the state of affairs in the company in press releases and do not manipulate information. Investors also trust press releases about the company’s future results, and tend to respond positively to the positive tone of the publications as well as to statements related to the disclosure of the company’s prospects.Classification-JEL: