Strategic Tone Shifting in Corporate Reporting: Analyzing MD&A and CSR Disclosures in Socially Responsible Firms

This paper examines whether managers of socially responsible firms strategically manage the tone of disclosure across different communication channels, with a focus on Management Discussion and Analysis (MD&A) and Corporate Social Responsibility (CSR) reports. Drawing on impression management theory, we argue that managers adjust the tone of narrative disclosures to maintain favorable perceptions among stakeholders while navigating varying levels of regulatory scrutiny. Using data from Chinese listed firms between 2010 and 2019, we find that socially responsible firms tend to adopt a more positive tone in MD&A than in CSR reports. However, when financial performance weakens, they reduce the positivity in MD&A—where litigation risk is higher—and instead emphasize a more positive tone in CSR reports, where disclosure regulation is less stringent. These results suggest that socially responsible firms shift their tone strategically across channels to balance impression management objectives with regulatory considerations. Our findings contribute to the literature on narrative disclosure and CSR communication strategies.