The Use of Euphemisms in Non-site Visits in China*

Abstract

Using a large sample of transcripts of corporate site visits (CSV) to Chinese public listed firms from 2012 to 2021, we examine whether the management uses more euphemisms when hosting non-site visits, which obfuscates the information integration of analysts. Our results suggest that managers tend to use euphemisms more frequently when hosting non-site visits and when they become more pessimistic, suggesting that managers may strategically muddle their message to investors and obfuscate the extent of bad news. Furthermore, more euphemism usage by managers in non-site visits distorts analysts' information integration and leads to greater analyst forecast dispersions. Our study adds to the literature on the impact of online corporate communication on analysts' information acquisition and, therefore, provides important implications on information disclosure obligations and information obstacles in emerging markets.