This study explores whether language barriers affect investors’ reactions to textual information in analyst reports. To this end, we compare the price reaction to the linguistic tone in Japanese and U.S. reports and analyze the effect of an English translation on that reaction. We find that prices react significantly to the linguistic tone in both Japanese and U.S. reports. However, we only observe a statistically significant price underreaction to Japanese reports. Further, the existence of an English translation mitigates this price underreaction. These findings support the view that language barriers induce investors to underreact to textual information.

这项研究探讨了语言障碍是否会影响投资者对分析师报告中文本信息的反应。为此，我们将价格反应与日本和美国报告中的语言基调进行了比较，并分析了英语翻译对该反应的影响。我们发现，价格在日本和美国的报告中对语言基调都有很大的反应。但是，我们只观察到对日本报告的价格有统计上的显着反应。此外，英语翻译的存在减轻了这种价格反应不足。这些发现支持以下观点：语言障碍促使投资者对文本信息反应不足。