Research On The Impact Of Excess Tone And Readability Of Social Responsibility Reports On Asset Mispricing

Modern financial theory states that the price of securities should equal the present value of their cash flows.However,recently,this model has been challenged by examples of asset prices seeming to deviate from their fundamental value,particularly during financial crises and major market events,where asset mispricing is prevalent.The phenomenon of asset prices deviating from their true value is more common,which not only harms the investment efficiency of investors but also leads to market failure.As a structured medium for management to disclose information to shareholders and external investors,the social responsibility report of listed companies is an important bridge of communication between management and investors.Information asymmetry is an important reason for the formation of asset mispricing.As the responsible party for disclosing information to stakeholders,the information held by management and investors is severely asymmetrical.Given that investors in the real capital market do not conform to the assumption of fully rational individuals,they are limited by their limited rationality and cognitive abilities and cannot obtain and accurately process all information.Therefore,when management embellishes publicly disclosed information for the sake of maintaining its own interests,it will lead to the current stage of asset pricing deviating from its true value.This article selects relevant data of A-share listed companies from 2006 to 2020,and studies the relationship between the readability and excess tone of social responsibility reports of listed companies and the level of asset mispricing from both theoretical analysis and empirical research based on existing research in the field of text analysis.It further explores the impact of excess tone and readability on asset mispricing under the influence of social responsibility report certification and mandatory disclosure.The results show that the higher the abnormal excess tone of the social responsibility report,the higher the level of asset mispricing,and the higher the readability of the social responsibility report,the more the degree of information asymmetry can be alleviated,and the lower the level of asset mispricing.Further research found that when the readability of social responsibility information is low,abnormal excess tone of social responsibility reports will lead to a higher level of asset mispricing,and the manipulation of excess tone and readability in social responsibility reports has a substitution effect.In the process of exploring the regulatory and moderating effects of social responsibility report certification and mandatory disclosure,it was found that social responsibility reports have a governance effect on asset mispricing,while mandatory disclosure will exacerbate the level of asset mispricing.Finally,based on empirical research,this article provides a comprehensive summary of the research findings and corresponding policy recommendations for the issues identified.The contribution and significance of this article lie in analyzing the impact of non-financial information disclosure on asset mispricing from the perspective of text analysis and testing the economic consequences of excess tone and readability manipulation in texts.Moreover,this article distinguishes the net tone in social responsibility reports into normal tone that can be explained by social responsibility performance and abnormal tone manipulated by management,refining the research on social responsibility text analysis for responsible parties of social responsibility disclosure,regulatory authorities,and information users to understand the economic consequences of information disclosure.