Affiliation:
1. Mercer University
2. University of South Alabama
3. Wright State University
Abstract
ABSTRACTThis study examines the degree to which Loughran and McDonald (LM) word lists are informative at the item level of SEC filings, such as risk factors (RF) and management’s discussion and analysis (MDA) disclosures in 10-X reports. In this context, we explore if sentiment types are informative when associated with other material events, namely cybersecurity breaches. Our results support the assertion that sentiment types, beyond positive and negative, are informative at the individual disclosure item level, as tested in the RF and MDA sections. We also find that investors respond to different types of sentiment between RF and MDA. We find an economically significant estimated average economic impact of $469 million/firm. We further contribute to the literature by applying novel statistical methods that advance empirical accounting literature.Data Availability: Data are available from the public sources cited in the text.
Publisher
American Accounting Association
Subject
Management of Technology and Innovation,Information Systems and Management,Human-Computer Interaction,Accounting,Information Systems,Software,Management Information Systems
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