Mutual Fund Shareholder Letter Tone Do Investors Listen?

Hillert, Alexander; Niessen‐Ruenzi, Alexandra; Ruenzi, Stefan

doi:10.2139/ssrn.2524610

Cited by 11 publications

(10 citation statements)

References 61 publications

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“…The LM word lists have also been used to gauge the tone of mutual fund letters to shareholders (Hillert, Niessen‐Ruenzi, and Ruenzi []), IPO prospectuses (Ferris, Hao, and Liao [], Loughran and McDonald []), and analyst reports (Twedt and Rees []). A promising technique to adapt existing dictionaries to alternative media is contained in Allee and DeAngelis [].…”

mentioning

confidence: 99%

Textual Analysis in Accounting and Finance: A Survey

Loughran

McDonald

2016

J of Accounting Research

1,604

786

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Relative to quantitative methods traditionally used in accounting and finance, textual analysis is substantially less precise. Thus, understanding the art is of equal importance to understanding the science. In this survey, we describe the nuances of the method and, as users of textual analysis, some of the tripwires in implementation. We also review the contemporary textual analysis literature and highlight areas of future research.

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confidence: 99%

Textual Analysis in Accounting and Finance: A Survey

Loughran

McDonald

2016

J of Accounting Research

1,604

786

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“…, 2019), IPO prospectuses (Ferris et al. , 2013), mutual fund shareholder letters (Hillert et al. , 2021) and credit rating reports (Kiesel, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

“…With the continuous advances in computer technology, a large literature has examined different sources of tone, such as the tone of annual reports (Loughran and McDonald, 2011), quarterly earnings announcements (Demers and Vega, 2011), management discussion and analysis (MD&A) sections (Li, 2010;Bochkay and Levine, 2019;Wang et al, 2021;Wu et al, 2021), earnings conference calls (Price et al, 2012;Davis et al, 2015;Brockman et al, 2017;Jiang et al, 2019), IPO prospectuses (Ferris et al, 2013), mutual fund shareholder letters (Hillert et al, 2021) and credit rating reports (Kiesel, 2016). In particular, the tone is related to stock return volatility (Kothari et al, 2009;Loughran and McDonald, 2011), cost of capital (Kothari et al, 2009;Campbell et al, 2017), future earnings (Li, 2010;Loughran and McDonald, 2011), trading volume (Loughran and McDonald, 2011;Price et al, 2012), cost of capital (Kothari et al, 2009;Campbell et al, 2017), stock market returns (Kiesel, 2016;Jiang et al, 2019), stock price (Arslan-Ayaydin et al, 2016), stock price crash risk (Ertugrul et al, 2017), capital structure adjustment speed (Wang et al, 2021) and firms' future value (Wu et al, 2021).…”

Section: Literature Review 21 Related Research On Tonementioning

confidence: 99%

Customers' annual report tone and suppliers' innovation decisions: evidence from China

Xin

Zeng

Luo

2022

EJIM

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PurposeThis paper examines whether and how customers' annual report tone affects suppliers' innovation decisions.Design/methodology/approachUsing the data from disclosed information on top five customers and annual report tone by Chinese listed firms, this paper used a two-way fixed effect model and intermediary effect model tests to explore the impact of customers' annual report tone on suppliers' innovation decisions.FindingsThe results indicate that the more positive the tone of customer annual reports is, the higher the suppliers' technological innovation level. The customers' annual report tone affects suppliers' innovation decisions through alleviating financing constraints and reducing the bullwhip effect. In addition, the authors find that the worse the supplier's bargaining power and the higher the customer's media coverage, the more significant the impact of positive customer annual report tone on the level of corporate technological innovation.Practical implicationsFor downstream customers, to improve the quality of their text information disclosure. For upstream suppliers, the tone of customers' annual reports has incremental information, so the attention to customers' text information should be strengthened. As far as the market is concerned, it is recommended that regulators should strictly require the quality of text information disclosure and introduce relevant penalty mechanisms better to regulate the quality of corporate text information disclosure.Originality/valueTo the best of the author's knowledge, this paper is the first to expand the research related to textual information from a supply chain innovation perspective. The textual information can provide incremental information, and spillover effects may occur among supply chains, affecting suppliers' innovation decisions. And it clarifies the specific mechanism by which the supply chain tone spillover effect affects corporate innovation, enriching the relevant research on supply chain influence mechanisms.

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“…First, we add to the fast-growing field of research using textual analysis . Earlier research has relied on textual analysis to assess the link between firms' financial performance and accounting documents' readability (e.g., Guay et al, 2016;Li, 2008), changes in the language and construction of annual reports (e.g., , document similarity (e.g., Brown & Tucker, 2011;, and the sentiment prevailing in annual reports or media (e.g., Hillert et al, 2021;Tetlock, 2007). We use a bag-of-words approach, on which sentiment analysis is also based, but use the approach to assess the extent to which firms have used and created digital innovation.…”

Section: B4 Parametric and Non-parametric Testmentioning

confidence: 99%

“…Thus, we follow a bag of words approach to parse the 10-Ks and derive vectors of words and word counts. This approach has been used in the Finance discipline, for instance to measure negative sentiment Hillert et al, 2021;Tetlock, 2007). Our dictionary is based on word lists developed and validated by .…”

Section: Digital Innovation and Text Analysis Of Firms' 10-ksmentioning

confidence: 99%

Promoting Digital Innovation and Transformation : Innovation Champions in the Digital Age

Drechsler¹

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The digital age, characterized by the proliferation of digital technologies and the intertwined phenomena of digital innovation and digital transformation, challenges previous knowledge about innovation champions, individuals who vigorously drive innovation projects inside organizations. This dissertation studies the individual and organizational determinants of successful innovation champions in the digital age by relying on a multi-method approach. The results of this dissertation show that in the digital age champions increasingly promote innovation as part of a diverse group of actors or as executive champions. Studying the link between chief digital officers (CDOs), as executive champions, and stock market performance, the dissertation identifies the substantial role of managerial power in investors' perception of CDO appointments. Additionally, this dissertation shows that the success of employees championing innovation in groups can be significantly enhanced by using a work model, which combines a digital platform with innovation time. This dissertation also deepens our understanding of the context in which innovation champions operate in the digital age by extending our knowledge of the nature of digital innovation and transformation. Finally, the dissertation unravels myths about innovation champions based on empirical and theoretical findings and moves toward a novel conceptualization of innovation champions.

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Mutual Fund Shareholder Letter Tone Do Investors Listen?

Cited by 11 publications

References 61 publications

Textual Analysis in Accounting and Finance: A Survey

Textual Analysis in Accounting and Finance: A Survey

Customers' annual report tone and suppliers' innovation decisions: evidence from China

Promoting Digital Innovation and Transformation : Innovation Champions in the Digital Age

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