Managers’ Body Expansiveness, Investor Perceptions, and Firm Forecast Errors and Valuation

Antonio Dávila, Martí Guasch

Research output: Indexed journal article Articlepeer-review

7 Citations (Scopus)


We examine the relation between a measure of managers’ physical display—body expansiveness—and favorable reporting practices (in firm forecasts and valuation information) and performance (survival and funding success). We videotape 154 entrepreneurs pitching their business ideas, and use computer vision software to obtain information about speakers’ movements. We show that physical expansiveness correlates with higher forecast errors and proposed firm valuations and lower survival rates yet higher likelihood of funding success. We argue that investors may incorrectly interpret nonverbal communication in their assessments of entrepreneurs and propose a behavioral explanation. We further corroborate the proposed mechanism by studying investor perceptions of entrepreneurs’ personal characteristics. Overall, we shed light on an overlooked source of information—nonverbal behavior—and relate it to firm forecasting, valuation, survival, and financing success, which are important factors in the assessment of investment opportunities, deal structure, and monitoring.

Original languageEnglish
Pages (from-to)517-563
Number of pages47
JournalJournal of Accounting Research
Issue number2
Publication statusPublished - May 2022
Externally publishedYes


  • entrepreneurs
  • financial projections
  • investor perceptions
  • nonverbal communication
  • startups
  • valuation


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