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Do words reveal the latent truth? Identifying communication patterns of corporate losers

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  • Kumar, Rahul
  • Deb, Soumya Guha
  • Mukherjee, Shubhadeep

Abstract

Identifying communication patterns of narratives in disclosed financial statements is assuming importance in recent times. This paper explores the communication patterns through various channels of loser firms which have witnessed prolonged underperformance and compare the same w.r.t their peers from the same industry. We perform sentiment analysis in published communication of these firms, to scrutinize their tone and emotional-valence. Our findings suggest that loser firms have a negative mood while conveying earnings vis-à-vis their comparable firms.

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  • Kumar, Rahul & Deb, Soumya Guha & Mukherjee, Shubhadeep, 2020. "Do words reveal the latent truth? Identifying communication patterns of corporate losers," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    • Handle: RePEc:eee:beexfi:v:26:y:2020:i:c:s221463501930228x
    DOI: 10.1016/j.jbef.2020.100291
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