IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v64y2023ics0275531923000260.html

Making sense and transparency in finance literature: Evidence from trends in readability

Author

Listed:
  • Lahmar, Oumaima
  • Piras, Luca

Abstract

Transparency continues to interest finance scholarship, as regards not just to financial reporting, but to a host of areas. Concomitantly, there is a growing emphasis on the transparency of the finance research process, with journals initiating requirements for uploading data and codes. However, little consideration is given to the transparency of finance scholarly texts, despite new emphasis by academic institutions and accreditation bodies on articles having an impact on practitioners. We use textual analysis to investigate the readability of articles in a selection of finance journals. Results evidence that academic articles are becoming less readable. Whether readability straightforwardly implies transparency is unclear, still, we consider these issues alongside our findings. Our study should be of great interest to those concerned with the state of finance scholarship.

Suggested Citation

  • Lahmar, Oumaima & Piras, Luca, 2023. "Making sense and transparency in finance literature: Evidence from trends in readability," Research in International Business and Finance, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531923000260
    DOI: 10.1016/j.ribaf.2023.101900
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531923000260
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2023.101900?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Biddle, Gary C. & Hilary, Gilles & Verdi, Rodrigo S., 2009. "How does financial reporting quality relate to investment efficiency?," Journal of Accounting and Economics, Elsevier, vol. 48(2-3), pages 112-131, December.
    2. Hun‐Tong Tan & Elaine Ying Wang & Bo Zhou, 2014. "When the Use of Positive Language Backfires: The Joint Effect of Tone, Readability, and Investor Sophistication on Earnings Judgments," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 52(1), pages 273-302, March.
    3. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    4. Samuel B. Bonsall & Brian P. Miller, 2017. "The impact of narrative disclosure readability on bond ratings and the cost of debt," Review of Accounting Studies, Springer, vol. 22(2), pages 608-643, June.
    5. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    6. Forssbaeck, Jens & Oxelheim, Lars, 2014. "The Oxford Handbook of Economic and Institutional Transparency," OUP Catalogue, Oxford University Press, number 9780199917693.
    7. Tim Loughran & Bill Mcdonald, 2011. "When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10‐Ks," Journal of Finance, American Finance Association, vol. 66(1), pages 35-65, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wenhuan Liu & Yue Yan & Bin Li & Chaosha Yang, 2024. "Does Readability Improve Investors’ Understanding of Hedging Positions?," Australian Accounting Review, CPA Australia, vol. 34(2), pages 178-186, June.
    2. Yao, Yanzhen & Wei, Lu & Jing, Haozhe & Chen, Meiqi & Li, Zhan, 2024. "The impact of readability of risk disclosures in bond prospectuses on credit risk premium," Research in International Business and Finance, Elsevier, vol. 70(PA).
    3. Cano-Rodríguez, Manuel & Moreno, Alonso, 2026. "Religion and the readability of textual financial disclosures," Research in International Business and Finance, Elsevier, vol. 81(C).
    4. Lin, Sin-Jin & Zeng, Jhih-Hong & Chang, Te-Min & Hsu, Ming-Fu, 2024. "Linguistic complexity consideration for advanced risk decision making and handling," Research in International Business and Finance, Elsevier, vol. 69(C).
    5. Moreno, Alonso, 2024. "Impression management in bilingual corporate reporting: An analysis of textual characteristics in Spanish and English," Research in International Business and Finance, Elsevier, vol. 70(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fahd Alduais & Nashat Ali Almasria & Abeer Samara & Ali Masadeh, 2022. "Conciseness, Financial Disclosure, and Market Reaction: A Textual Analysis of Annual Reports in Listed Chinese Companies," IJFS, MDPI, vol. 10(4), pages 1-22, November.
    2. Abukari, Kobana & Dutta, Shantanu & Li, Chen & Tang, Songlian & Zhu, Pengcheng, 2024. "Corporate communication and likelihood of data breaches," International Review of Economics & Finance, Elsevier, vol. 94(C).
    3. Hossain, Amir & Bose, Sudipta & Shamsuddin, Abul, 2025. "Do integrated report readability and tone convey value relevant information? International evidence," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(3).
    4. Sharma, Shivani & Sharma, Udayan, 2025. "What does green bond prospectus communicate about credit spread?," Finance Research Letters, Elsevier, vol. 79(C).
    5. Chen, Jean Jinghan & Song, Peiyang & Loi, Fai Lim, 2024. "Strategic forward-looking nonearnings disclosure and overinvestment," The British Accounting Review, Elsevier, vol. 56(6).
    6. Vu, Lien Phuong Thi & Mai, Anh Ngoc & Nguyen, Thai Hoang & Nguyen, Tuan Hoang & Nguyen, Thuy Thanh & Bui, Quyen To, 2025. "Do narrative-related disclosures in annual reports influence corporate risk-taking? Insights from an emerging economy," International Review of Economics & Finance, Elsevier, vol. 103(C).
    7. Soliman, Marwa & Ben-Amar, Walid, 2022. "Corporate social responsibility orientation and textual features of financial disclosures," International Review of Financial Analysis, Elsevier, vol. 84(C).
    8. Gounopoulos, Dimitrios & Huang, Winifred & Yang, Min, 2025. "Innovation and annual report readability," Research Policy, Elsevier, vol. 54(8).
    9. Xiao Carol Cui, 2016. "Calisthenics with Words: The Effect of Readability and Investor Sophistication on Investors’ Performance Judgment," IJFS, MDPI, vol. 4(1), pages 1-14, January.
    10. Ahsan Habib & Mostafa Monzur Hasan, 2020. "Business strategies and annual report readability," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2513-2547, September.
    11. Cano-Rodríguez, Manuel & Moreno, Alonso, 2026. "Religion and the readability of textual financial disclosures," Research in International Business and Finance, Elsevier, vol. 81(C).
    12. Hasan, Mostafa Monzur & Habib, Ahsan, 2020. "Readability of narrative disclosures, and corporate liquidity and payout policies," International Review of Financial Analysis, Elsevier, vol. 68(C).
    13. Yao, Kai & Chevapatrakul, Thanaset & Nguyen, Thach Vu Hong & Yin, Shiyan, 2026. "Uncertainty words and corporate information environment," Research in International Business and Finance, Elsevier, vol. 81(C).
    14. Jieyan Fang-Klingler, 2019. "Impact of Readability on Corporate Bond Market," JRFM, MDPI, vol. 12(4), pages 1-18, December.
    15. Nazari, Jamal A. & Hrazdil, Karel & Mahmoudian, Fereshteh, 2017. "Assessing social and environmental performance through narrative complexity in CSR reports," Journal of Contemporary Accounting and Economics, Elsevier, vol. 13(2), pages 166-178.
    16. Sun, Li & Johnson, Grace & Bradley, Wray, 2022. "CEO power and annual report reading difficulty," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(2).
    17. Rjiba, Hatem & Saadi, Samir & Boubaker, Sabri & Ding, Xiaoya (Sara), 2021. "Annual report readability and the cost of equity capital," Journal of Corporate Finance, Elsevier, vol. 67(C).
    18. Mousa, Gehan A. & Elamir, Elsayed A.H. & Hussainey, Khaled, 2022. "The effect of annual report narratives on the cost of capital in the Middle East and North Africa: A machine learning approach," Research in International Business and Finance, Elsevier, vol. 62(C).
    19. Pradhan, Rudra P. & Samarakoon, S.M.R.K. & Wijesinghe, B.A.C.H. & Maradana, Rana P., 2025. "Clear or confusing? How financial report readability and tone are associated with dividend payouts in Indian corporations," The Quarterly Review of Economics and Finance, Elsevier, vol. 104(C).
    20. Danial Hemmings & Lynn Hodgkinson & Gwion Williams, 2020. "It's OK to pay well, if you write well: The effects of remuneration disclosure readability," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(5-6), pages 547-586, May.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531923000260. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.