Muddy the Waters to Conceal Information?Textual Analysis of Firms' Responses to Different Types of Investors

This paper investigates the differential responses by managers to institutional investors during site visits and to retail investors during online Q&As. We find that the gap in firm responses to different types of investors increases the potential for comment letters to be sent to firms and higher information asymmetry, consistent with the notion that this gap implies a lower quality of information disclosure. Additional tests show that managers are more likely to post different responses when investors' questions have a more negative orientation