Mining risk-related sentiment in corporate annual reports and its effect on financial performance

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F20%3A39916632" target="_blank" >RIV/00216275:25410/20:39916632 - isvavai.cz</a>

Result on the web

<a href="https://journals.vgtu.lt/index.php/TEDE/article/view/13758" target="_blank" >https://journals.vgtu.lt/index.php/TEDE/article/view/13758</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3846/tede.2020.13758" target="_blank" >10.3846/tede.2020.13758</a>

Result language

angličtina

Original language name

Mining risk-related sentiment in corporate annual reports and its effect on financial performance

Original language description

Models that predict corporate financial risk are important early-warning systems for corporate stakeholders. Most models to date have been developed using financial indicators. However, in financial decision-making, increasing attention is being paid to the role of textual information, which may provide additional insight into managerial opinions and intentions and which has recently been used to more effectively predict corporate financial performance. Previous approaches in this regard have predominantly focused on sentiment analysis of managerial communication. However, the role of context-related sentiment remains poorly understood in the financial risk domain. Here, we investigate how risk-related sentiment in verbal managerial communication might predict corporate financial performance, including indebtedness, profitability, market value and bankruptcy risk. To ensure deductive content validity, we propose specific word lists for each type of corporate financial risk and assign each word with positive / negative labels. Our findings provide evidence for a major role of risk-related sentiment as an indicator of corporate performance in terms of financial risks. Notably, using novel risk-related word lists in regression models, we show that a proactive and opportunity-seeking risk management has a significantly positive impact on financial performance, implying that stakeholders should carefully consider the risk-related managerial communication in corporate annual reports.

Czech name

—

Czech description

—

Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50202 - Applied Economics, Econometrics

Project

<a href="/en/project/GA19-15498S" target="_blank" >GA19-15498S: Modelling emotions in verbal and nonverbal managerial communication to predict corporate financial risk</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2020

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Technological and Economic Development of Economy

ISSN

2029-4913

e-ISSN

—

Volume of the periodical

26

Issue of the periodical within the volume

6

Country of publishing house

LT - LITHUANIA

Number of pages

22

Pages from-to

1422-1443

UT code for WoS article

000596389400013

EID of the result in the Scopus database

2-s2.0-85097375468