The influence of corporate integrity culture on narrative disclosure strategies in MD&A

This study investigates how corporate integrity culture shapes firms' narrative disclosure strategies in the Management Discussion and Analysis (MD&A) section. Using a sample of Chinese A-share listed firms from 2013 to 2021, the results show that firms with stronger integrity cultures produce MD&A disclosures that exhibit lower textual similarity and lower readability. This pattern suggests that integrity-oriented firms prefer more differentiated and information-rich narratives while adopting more elaborate textual structures, reflecting a strategic balance between transparency and proprietary cost protection. Further analysis shows that these effects vary under different conditions. First, analyst coverage weakens the effect of integrity culture on both textual similarity and readability. In contrast, R&D intensity and financing constraints make these effects stronger. The evidence points to corporate culture as a key strategic factor that shapes how firms conduct narrative disclosure behavior. By examining textual similarity and readability as dual dimensions of disclosure strategy, this study provides new evidence on how cultural values influence corporate disclosure in capital markets.