Textual Analysis in Accounting and Finance: A Survey

56 Pages Posted: 3 Oct 2014 Last revised: 21 May 2016

Tim Loughran

University of Notre Dame

Bill McDonald

University of Notre Dame - Mendoza College of Business - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: May 20, 2016

Abstract

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.

Keywords: Textual analysis; sentiment analysis; bag-of-words; readability; word lists; Zipf’s law; cosine similarity; Naïve Bayes

JEL Classification: D82; D83; G14; G18; G30; M40; M41

Suggested Citation

Loughran, Tim and McDonald, Bill, Textual Analysis in Accounting and Finance: A Survey (May 20, 2016). Available at SSRN: https://ssrn.com/abstract=2504147 or http://dx.doi.org/10.2139/ssrn.2504147

Tim Loughran (Contact Author)

University of Notre Dame ( email )

Department of Finance
245 Mendoza College of Business
Notre Dame, IN 46556-5646
United States
574-631-8432 (Phone)
574-631-5255 (Fax)

Bill McDonald

University of Notre Dame - Mendoza College of Business - Department of Finance ( email )

P.O. Box 399
Notre Dame, IN 46556-0399
United States

Paper statistics

Downloads
3,593
Rank
1,962
Abstract Views
9,136