The power of words: the impact of power language in corporate financial disclosures

Loading...
Thumbnail Image
Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
University of Alabama Libraries
Abstract

The current research seeks to understand how CEOs use power in their language when disclosing financial information and its ability to predict the financial success of a company. The amount of power one has dictates one’s ability to achieve goals and influence others (Berger, 1985), and those with power are constantly engaging in behaviors and actions that communicate the amount of power they have (Hall, Coats & LeBeau, 2005). Nonverbal communication is used to display power through channels such as hand and body gestures, facial expressions, and language. Using the Linguistic Inquiry and Word Count (LIWC) software, an analysis of power language communicated by CEOs through their Management Discussion and Analysis (MD&A) section of their SEC 10-K filing was conducted and examined in relation to net income. It was found that companies that use more power language in MD&A statements have higher net incomes; companies with female CEOs, while having higher overall net incomes, have no relationship between power language and net income; companies with male CEOs have a significant relationship between power language and net income. Future research should explore the perception of power language in MD&As and its impact on investment decisions.

Description
Electronic Thesis or Dissertation
Keywords
Communication
Citation