Infographics are increasingly used in financial disclosures to improve communication with investors. However, while prior research has primarily focused on examining the informational value of linguistic attributes in financial disclosures, it has largely overlooked the financial implications of visual content within these disclosures. Drawing on dual coding theory, indicating that presenting information through both verbal (i.e., information from written or spoken texts) and visual formats enhances cognitive processing, we examine whether infographics play a significant role in mitigating information asymmetry. Exploiting the high level of information asymmetry of Initial Coin Offerings (ICOs), we find that infographics positively influence the amount raised during the ICO and that this relationship is strengthened when the textual content of the white paper is more technical in nature. We further find that ICO analysts act as a mediation channel through which infographics lead to an increase in the ICO funding success. Overall, our findings highlight that visual cues help mitigate information asymmetry and contribute to funding success in the unregulated and uncertain environment of the ICO market.
Keywords : Infographics, Dual Coding Theory, Initial Coin Offerings, Entrepreneurial Finance.
