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Lookup NU author(s): Dr Jose LiuORCiD, Professor Simon HussainORCiD
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This paper examines the relationship between managerial ability and the tone of corporate reporting narratives in Chinese listed firms’ Management Discussion and Analysis (MD&A) sections, and how this relationship varies with both state-designated media and market-oriented media coverage. This dichotomy between media outlets, together with the differences in linguistic practices by Chinese companies, relative to those in Anglo-Saxon territories, provide a rationale for our paper’s regional focus. We find that higher managerial ability is associated with a less optimistic tone in Chinese MD&A narrative disclosures, which augments prior evidence from narratives in voluntary earnings press releases. This negative relationship between managerial ability and MD&A narrative tone is stronger when a firm’s breadth of media coverage increases, indicating that the media plays a monitoring role in external corporate governance. However, this media coverage effect is conditional on the type of media. News coverage by state-designated media strengthens the negative association between managerial ability and MD&A narrative tone, but market-oriented media coverage has no significant effect. In addition, the effects are primarily driven by state-owned enterprises, highlighting the role of state-linked media governance in shaping corporate disclosure tone.
Author(s): Liu J, Liu P, Hussain S
Publication type: Article
Publication status: In Press
Journal: Journal of International Accounting, Auditing and Taxation
Year: 2026
Acceptance date: 31/05/2026
ISSN (print): 1061-9518
ISSN (electronic): 1879-1603
Publisher: Elsevier Ltd
Notes: Conditionally accepted May 2026 but requires special formatting and editing for this journal prior to final acceptance (hence I have not yet uploaded the text for this paper yet)
