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Over-optimistic Expectations, Corporate Risk-taking, and R&D Investment—A Study Based on Natural Language Processing

In: INTERNET FINANCE AND DIGITAL ECONOMY Advances in Digital Economy and Data Analysis TechnologyThe 2nd International Conference on Internet Finance and Digital Economy, Kuala Lumpur, Malaysia, 19 – 21 August 2022

Author

Listed:
  • Lingyu Li
  • Qing Wu

Abstract

This paper investigates the relationship between management over-optimism, corporate risk-taking, and R&D investment by using natural language processing technology. This paper uses Python 3.9 to extract the frequency of optimistic words to measure the emotion of management in the text. The results of the Stata 16.0 analysis indicate a significant positive correlation between management’s overly optimistic expectations and R&D investment and how corporate risk-taking mediates this relationship.

Suggested Citation

  • Lingyu Li & Qing Wu, 2023. "Over-optimistic Expectations, Corporate Risk-taking, and R&D Investment—A Study Based on Natural Language Processing," World Scientific Book Chapters, in: Faruk Balli (ed.), INTERNET FINANCE AND DIGITAL ECONOMY Advances in Digital Economy and Data Analysis TechnologyThe 2nd International Conference on Internet Finance and , chapter 61, pages 821-832, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811267505_0061
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    More about this item

    Keywords

    Internet Economy; Online Finance; Financial Engineering; Big Data; Blockchain; Supply Chain; E-commerce;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G2 - Financial Economics - - Financial Institutions and Services

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