Abstract：From a forward-looking perspective, this study takes Chinese non-financial and non-real estate main board listed companies as research objects to investigate the predictive effect and channeling mechanism of management discussion and analysis(MD&A) tone on the future risk of de-reality-to-virtual through empirical research. The results show that MD&A normal optimistic tone predicts lower risk of de-reality-to-virtual, while MD&A abnormal optimistic tone and abnormal pessimistic tone predict higher risk of de-reality-to-virtual, and MD&A normal pessimistic tone does not predict significantly. The mechanism test shows that MD&A tone can influence the risk of de-reality-to-virtual by influencing the degree of financing constraint. Further research shows that heterogeneous institutional investors can influence the predictive effect of MD&A tone on the risk of de-reality-to-virtual, and focused institutional investors play an effective risk prevention and control role.
