The Relationship between the Company’s Value and the Tone of the Risk-Related Narratives: The Case of Portugal

The present study aims to identify the impact of tone risk reporting narratives on company market value. paper uses a sample 34 Portuguese non-finance companies with shares traded at Euronext Lisbon stock exchange market. conducts an automated content analysis included in and management sections annual reports for 2018 by using software DICTION 7 (Digitext, Inc., Austin, TX, USA) retrieve speech tone. Main findings indicate that category “activity” is associated negatively company’s This result shows investors misprice information incorporates traces overconfidence, narcissistic self-confidence heroic leadership. extends prior literature analyzing economic incentives narratives, not yet studied. Findings are both relevant support their decision-making processes managers strategically manage communication tactics benefit from advantages emanated them. Limitations related research setting do undermine generalization because algorithm provided assures analysis’s reliability. used corresponds population listed companies.