This paper studies how mutual fund managers update their beliefs as macroeconomic conditions change. Using regulator-mandated reports from Chinese mutual funds, we measure the intensity of belief updating from year-over-year changes in stated outlooks and decompose those updates into macro and micro themes. We show that belief updating is state-contingent: funds with more intensive belief updating shift their narratives toward macro (micro) topics during recessions (expansions) and concurrently reduce (increase) procyclical stock exposures and on-site company visits. This state-contingent belief updating predicts superior performance when matched to prevailing economic conditions, with macro-oriented updates paying off mainly for high-updating funds in recessions and micro-oriented updates paying off more broadly in expansions. Investors recognize this signal of skill, allocating greater flows to these funds, especially when past returns are less informative. Finally, belief updating is stronger for younger managers and for funds from newer, smaller families, consistent with signaling under career and competitive pressures.

This study examines the influence of ESG report textual similarity on stock price synchronicity within the Chinese A-share market. Using advanced textual analysis methods, including TF-IDF and LDA, we measure the textual similarity of ESG reports among industry peers. Our results reveal a positive association between ESG report textual similarity and stock price synchronicity, suggesting that ESG reports with high textual resemblance may not convey distinct market information. This research underscores the importance of textual distinctiveness in ESG reports and offers a fresh perspective on the role of non-financial information, particularly related to CSR, in stock pricing dynamics. By emphasizing the significance of ESG report textual distinctiveness, we contribute to the broader discourse on ESG disclosure behaviors and their implications for capital market efficiency.

This study examines the influence of ESG report textual similarity on stock price synchronicity within the Chinese A-share market. Using advanced textual analysis methods, including TF-IDF and LDA, we measure the textual similarity of ESG reports among industry peers. Our results reveal a positive association between ESG report textual similarity and stock price synchronicity, suggesting that ESG reports with high textual resemblance may not convey distinct market information. This research underscores the importance of textual distinctiveness in ESG reports and offers a fresh perspective on the role of non-financial information, particularly related to CSR, in stock pricing dynamics. By emphasizing the significance of ESG report textual distinctiveness, we contribute to the broader discourse on ESG disclosure behaviors and their implications for capital market efficiency.