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

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

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

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

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

Popis výsledku anglicky

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.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

<a href="/cs/project/GA19-15498S" target="_blank" >GA19-15498S: Modelování emocí ve verbální a neverbální manažerské komunikaci pro predikci podnikových finančních rizik</a><br>

Návaznosti

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

Rok uplatnění

2020

Kód důvěrnosti údajů

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

Název periodika

Technological and Economic Development of Economy

ISSN

2029-4913

e-ISSN

—

Svazek periodika

26

Číslo periodika v rámci svazku

6

Stát vydavatele periodika

LT - Litevská republika

Počet stran výsledku

22

Strana od-do

1422-1443

Kód UT WoS článku

000596389400013

EID výsledku v databázi Scopus

2-s2.0-85097375468