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Differential Communication and Local Information Advantage: Revelations from Translation Differences

Tina Lang et al.

The Accounting Review2026https://doi.org/10.2308/tar-2023-0274article
FT50UTD24AJG 4*ABDC A*
Weight
0.50

Abstract

We develop an empirical proxy for companies’ differential communication to local and foreign investors using translation differences in public disclosure. We validate our proxy using a field experiment and then use this proxy to document that differential communication is associated with increases in information asymmetry between local and foreign investors. It is also linked to decreases in the relative information quality of foreign analysts, even when foreign demand for information is high and communication costs are low. These and a variety of supporting tests, including those using an alternative artificial intelligence (AI)-based measure of translation differences, suggest that firms engage in differential communication because of a preference for local investors and when responding to incentives to maximize stock price. This study highlights the role of differential communication as one driver of local information advantage in our setting. Data Availability: Most data are available from publicly available sources, as described in the paper. The field experiment data are available upon request. JEL Classifications: G15; G14; M40; M41; G30.

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https://doi.org/https://doi.org/10.2308/tar-2023-0274

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@article{tina2026,
  title        = {{Differential Communication and Local Information Advantage: Revelations from Translation Differences}},
  author       = {Tina Lang et al.},
  journal      = {The Accounting Review},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.2308/tar-2023-0274},
}

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Differential Communication and Local Information Advantage: Revelations from Translation Differences

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.