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CEO Regulatory Focus as an Interpretive Frame: An Empirical Examination of Investor Perceptions in the Context of Earning Deviations

Srikanth Paruchuri et al.

Academy of Management Journal2026https://doi.org/10.5465/amj.2023.0896article
FT50UTD24AJG 4*ABDC A*
Weight
0.50

Abstract

Investors perceive a CEO’s regulatory foci based on the language they use. Complementing earlier studies on the direct effects of CEO regulatory focus, we propose a novel theoretical paradigm in which CEOs’ regulatory-focused language act as interpretive frames shaping investors’ reactions to earnings deviations—the positive or negative earnings deviations from analysts’ expectations. We propose that investor reactions to earnings deviations will be amplified when investors perceive a CEO to have higher promotion focus, and dampened when investors perceive a CEO to have higher prevention focus. We employ a multimethod approach to test our theorizing; we use an archival study of S&P 500 firms from 2003 to 2017 to test our hypotheses, and two preregistered randomized vignette experiments to explore the underlying investor attributions theorized in our framework. Across all studies, we find broad support for our theorization regarding how CEO regulatory-focused language acts as interpretive frames for investors, which has important implications for research on the social view of financial markets and CEO regulatory focus.

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https://doi.org/https://doi.org/10.5465/amj.2023.0896

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@article{srikanth2026,
  title        = {{CEO Regulatory Focus as an Interpretive Frame: An Empirical Examination of Investor Perceptions in the Context of Earning Deviations}},
  author       = {Srikanth Paruchuri et al.},
  journal      = {Academy of Management Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.5465/amj.2023.0896},
}

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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.