The Influence of CEO Letters’ Tone on Financial Indicators of the Company

Authors

  • Elena A. Fedorova Financial University under Government of Russian Federation, Moscow, Russia; National Research University Higher School of Economics, Moscow, Russia https://orcid.org/0000-0002-3381-6116
  • Igor S. Demin Financial University under Government of Russian Federation, Moscow, Russia
  • Lyubov E. Khrustova Financial University under Government of Russian Federation, Moscow, Russia
  • Fedor Yu. Fedorov Financial University under Government of Russian Federation, Moscow, Russia
  • Roman A. Osetrov National Research University Higher School of Economics, Moscow, Russia

DOI:

https://doi.org/10.21638/11701/spbu18.2017.403

Abstract

The paper is devoted to the analysis of CEO letters as an instrument for influencing the expectations of shareholders and potential investors. The aim of the research is to analyze empirically the influence of semantic characteristics of CEO letters on financial indicators of the company. The authors suggested that CEO letter’s tonality, its length and readability have a great impact on the company’s financial indicators, their prediction and mid-year stock value. To check the hypotheses stated, a sample group of 102 Russian companies was analyzed with the use of “bag of words” method (specialized dictionaries were applied). For this purpose, neural network models were also developed. The results obtained confirmed the influence of CEO letter’s semantic characteristics on the stock value of company.

 

Keywords:

CEO letter, bag of words, text analysis, neural networks

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References

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Published

2017-12-28

How to Cite

Fedorova, E. A., Demin, I. S., Khrustova, L. E., Fedorov, F. Y., & Osetrov, R. A. (2017). The Influence of CEO Letters’ Tone on Financial Indicators of the Company. Russian Management Journal, 15(4), 441–462. https://doi.org/10.21638/11701/spbu18.2017.403

Issue

Vol. 15 No. 4 (2017)

Section

Theoretical and Empirical Studies

License

Articles of the Russian Management Journal are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.