Measuring the Tone of Accounting and Financial Narrative

2014 ◽  
pp. 36-47
Author(s):  
Elaine Henry ◽  
Andrew J. Leone
Keyword(s):  
Word Frequency ◽  
Earnings Announcements ◽  
Press Releases ◽  
Social Psychologist ◽  
Word Lists ◽  
Alternative Measures ◽  
Earnings Press Releases ◽  
Frequency Counts

Research in accounting and finance has measured the tone of financial narrative using word frequency counts based mainly on four different wordlists: 1) a wordlist developed in Henry’s (2006, 2008) analysis of earnings announcements (Henry Wordlist); 2) a wordlist developed in Loughran and McDonald’s (2011) analysis of 10-K filings (LM Wordlist); 3) a wordlist from DICTION (DICTION Wordlist) software developed by Roderick Hart; and 4) a wordlist from the General Inquirer program (GI Wordlist) developed by social psychologist Philip Stone. This chapter examines alternative measures of the tone of narrative in earnings press releases based on these word lists, explores the statistical relations among the alternative measures, and tests whether those relations vary depending on aspects of the earnings news being announced and other factors.

Are family firms more optimistic than non-family firms?

2019 ◽  
Vol 32 (3) ◽  
pp. 399-416 ◽  
Author(s):  
Xuan Huang ◽  
Fei Kang
Keyword(s):  
Family Firms ◽  
Earnings Announcements ◽  
Family Ownership ◽  
Press Releases ◽  
Firm Level ◽  
Content Type ◽  
Alternative Measures ◽  
Disclosure Tone ◽  
The Impact ◽  
Earnings Press Releases

Purpose The purpose of this study is to investigate how family ownership affects the disclosure tone of firm earnings press releases. Design/methodology/approach Following prior literature, this study defines family firms as those in which members of the founding families continue to hold positions in top management, to sit on the board or to be blockholders. The disclosure tone of earnings press releases is measured by the level of optimism in firms’ earnings announcements using Loughran and McDonald’s (2011) word classifications. Multivariate analysis is performed to examine the impact of family ownership on firms’ disclosure tone. Additional analysis includes controlling for different firm-level characteristics and using alternative measures of disclosure tone. Findings This study documents that the disclosure tone of earnings announcements is more optimistic for family firms than for non-family firms. The result implies that family owners’ large undiversified equity position in their business results in strong incentives for them to issue more positive earnings announcements to maintain high stock performance. Further analysis reveals that the results are mainly driven by family firms with founder CEOs. The results are robust to controls for corporate governance characteristics and to alternative measures of corporate disclosure tone. Originality/value The findings of this study contribute to the literature that examines factors associated with the determinants of the tone in firms’ earnings announcements. In addition, this study adds to the extant literature on family firms by providing useful insight into the influence of family control on corporate voluntary disclosure.

Are Investors Influenced by the Order of Information in Earnings Press Releases?

2020 ◽  
Author(s):  
Lin Cheng ◽  
Darren T. Roulstone ◽  
Andrew Van Buskirk
Keyword(s):  
Experimental Evidence ◽  
Earnings Announcements ◽  
Negative Information ◽  
Positive Relation ◽  
Press Releases ◽  
Cognitive Effect ◽  
Earnings Announcement ◽  
Quarterly Earnings ◽  
Earnings Information ◽  
Earnings Press Releases

We examine how the ordering of information within quarterly earnings announcements influences investor response to those announcements. Specifically, we examine whether earlier discussion of earnings information, and earlier discussion of qualitatively positive or negative information, is associated with stronger responses to that information. Controlling for the linguistic content of the earnings announcement, we find a positive relation between investor response to information and the prioritization of that information in the earnings announcement. We find no evidence of investor overreaction and, to the contrary, find some evidence that investors underreact to prioritized information. Our evidence, in conjunction with experimental evidence in Elliott (2006), suggests that information placement influences investors' responses. However, unlike the experimental evidence in Elliott (2006), our archival results suggest that investor response to information placement is warranted, rather than the result of an unintentional cognitive effect.

Word frequency counts

2018 ◽  
Vol 41 (2) ◽  
pp. 224-239
Author(s):  
Bartosz Brzoza
Keyword(s):  
Word Frequency ◽  
Language Processing ◽  
Applied Research ◽  
Native Speakers ◽  
Present Contribution ◽  
Subjective Frequency ◽  
Corpus Linguistic ◽  
Comprehensive Picture ◽  
The Relationship ◽  
Frequency Counts

Abstract Lexical frequency is one of the major variables involved in language processing. It constitutes a cornerstone of psycholinguistic, corpus linguistic as well as applied research. Linguists take frequency counts from corpora and they started to take them for granted. However, voices emerge that corpora may not always provide a comprehensive picture of how frequently lexical items appear in a language. In the present contribution I compare corpus frequency counts for English and Polish words to native speakers’ perception of frequency. The analysis shows that, while generally objective and subjective values are related, there is a disparity between measures for frequent Polish words. The direction of the relationship, though positive, is also not as strong as in previous studies. I suggest linking objective with subjective frequency measures in research.

The Relations of Stuttering to Word Length and Word Frequency

1966 ◽  
Vol 9 (4) ◽  
pp. 584-589 ◽  
Author(s):  
George A. Soderberg
Keyword(s):  
Word Frequency ◽  
Word Length ◽  
Grammatical Function ◽  
Word Lists

Twenty stutterers recorded nine 10-word lists in the presence of a single listener. The word lists were composed of combinations of three levels of word length and three levels of word frequency. An attempt was made to equate the word lists for stress of initial syllables, grammatical function, and initial sounds of words. The results agree with those of previous studies that have found a significantly greater frequency of stuttering to be associated with increases of word length and decreases of word frequency. However, the findings suggested that word length was the more potent of the two variables in effect on the frequency of stuttering.

scholarly journals The framing and reframing of corporate financial results

2016 ◽  
Vol 21 (1) ◽  
pp. 103-119 ◽  
Author(s):  
Julian Rosenkranz ◽  
Irene Pollach
Keyword(s):  
Press Releases ◽  
Content Type ◽  
Financial News ◽  
Financial Communication ◽  
News Agencies ◽  
Corporate Earnings ◽  
Positive Statements ◽  
Earnings Releases ◽  
Earnings Press Releases

Purpose – News agencies are important stakeholders for large organizations, since the news they distribute will be adopted by other news outlets, which influence public opinion and hence corporate reputation. The purpose of this paper is to advance the understanding of how corporate earnings press releases are transformed into financial news by investigating whether the frames introduced by companies are adopted or reframed by news agencies. Design/methodology/approach – A content analysis of framing techniques in corporate earnings releases and their corresponding news-agency releases was performed, focussing on the financial figures and benchmarks presented, performance attributions, and the tonality of the texts. Findings – The findings suggest that news agencies reframe earnings releases at the textual-pragmatic level by reducing their length, using fewer financial figures, and changing the position of these figures in the texts; they increase transparency by avoiding adjusted financial figures, qualifying figures, and adding analyst assessments; and they change the tonality by down-toning positive statements and highlighting negative aspects. Originality/value – This paper makes a contribution to the field of corporate financial communication, which has not shed much light on the transformation of earnings press releases into financial news. In addition, this paper contributes to the stream of research on journalistic transformations of corporate press releases in general, which has ignored the influential role of news agencies as both manufacturers and wholesalers of news.

Managers set the tone: Equity incentives and the tone of earnings press releases

2016 ◽  
Vol 72 ◽  
pp. S132-S147 ◽  
Author(s):  
Özgür Arslan-Ayaydin ◽  
Kris Boudt ◽  
James Thewissen
Keyword(s):  
Press Releases ◽  
Equity Incentives ◽  
Earnings Press Releases
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