Does the Management Tone Information Convey the Level of Firm Innovation? : Evidence from Earnings Communication Conferences of GEM Listed Companies

Based on the text analysis of the 2010-2017 performance briefings of non-financial companies on China Growth Enterprise Market, this paper studies the relationship between management tone and corporate innovation. The conclusion of the study is that there is no significant relationship between the positive tone of management and corporate innovation, which confirms that in our high-context society, people’s language preference is to say good things and cannot convey true information. The more negative the tone of management, the lower the level of corporate innovation. However, the more positive the net tone of management, the higher the level of corporate innovation, which indicates that the tone information answered by management can convey the level of corporate innovation to a certain extent. Further analysis found that, the higher the quality of accounting information, the more significant the relationship between management tone and corporate innovation. This conclusion provides theoretical support and empirical evidence for regulators to strengthen the management tone behavior of management performance briefings, to identify innovative behaviors of listed companies for investors, and to improve the capital market information environment.