In this study we investigate the utility of vivid and interactive graphical displays in a heretofore unexplored setting, specifically their use in corporate digital annual reports for the purpose of impression management. We investigate how such displays of positive nonfinancial news impact nonprofessional investors’ impressions of a firm’s performance when financial news is negative. Using an experiment with 324 participants from Amazon Mechanical Turk, we investigate the counteracting effects of varying the user interactivity and graphical vividness of the presentation of non-financial good news on the bad news presented in the audited financial data. We find that nonprofessional investors perceive a firm’s performance more positively when they view non-financial information with a user interactivity function. The positive effect of user interactivity is stronger when the graphical presentation of non-financial information is vivid versus pallid. Finally, we find that user engagement positively mediates the effects of user interactivity on nonprofessional investors’ perceptions of firm performance and investment-related judgments and decisions. These results have implications for the designers of digital annual reports, investor groups consuming this information, and regulators concerned about the need for assurance on (unregulated) non-financial disclosures in annual reports.
Zhang, Yibo (James) and Murthy, Uday S., "IMPRESSION MANAGEMENT USING VIVID AND INTERACTIVE GRAPHS IN ONLINE ANNUAL REPORTS: AN EXPERIMENTAL INVESTIGATION" (2020). ECIS 2020 Research Papers. 70.
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