Forward-looking information disclosure tone, financing constraints and marketing expenditures

Forward-looking information is often seen as private messages that managers deliver to the public, and a positive tone usually implies a positive signal from them. We use a sample of Shanghai and Shenzhen A-shares from 2011 to 2020 to examine the relationships between forward-looking information tone and company marketing expenditures. Our findings show that: first, forward-looking information tones contain valuable content that investors can comprehend, and the more positive the tone, the greater the marketing expenditures a company has. Second, this positive relationship is strengthened for companies that are more financially constrained. Finally, optimistic forward-looking messages can increase marketing expenditures in a greater magnitude for companies operating in the areas subject to a higher degree of marketisation.