Word power: A new approach for content analysis

We present a new approach for content analysis to quantify document tone. We find a significant relation between our measure of the tone of 10-Ks and market reaction for both negative and positive words. We also find that the appropriate choice of term weighting in content analysis is at least as im...

Full description

Saved in:
Bibliographic Details
Published inJournal of financial economics Vol. 110; no. 3; pp. 712 - 729
Main Authors Jegadeesh, Narasimhan, Wu, Di
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.12.2013
Elsevier Sequoia S.A
Subjects
Content analysis
Initial public offering
Initial public offerings
Language
Lexicons
Market analysis
Market theory
Pricing
Studies
Subjectivity
Term weighting
Lexicons
G14
G19
Content analysis
Term weighting
Online AccessGet full text

Cover

More Information
Summary:We present a new approach for content analysis to quantify document tone. We find a significant relation between our measure of the tone of 10-Ks and market reaction for both negative and positive words. We also find that the appropriate choice of term weighting in content analysis is at least as important as, and perhaps more important than, a complete and accurate compilation of the word list. Furthermore, we show that our approach circumvents the need to subjectively partition words into positive and negative word lists. Our approach reliably quantifies the tone of IPO prospectuses as well, and we find that the document score is negatively related to IPO underpricing.
Bibliography:SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 14
ObjectType-Article-2
content type line 23
ISSN:0304-405X
1879-2774
DOI:10.1016/j.jfineco.2013.08.018