The use and trend of emotional language in the banks’ annual reports: the state of the global financial crisis

  • 475 Views
  • 23 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

This study is of an exploratory nature as it seeks to explore the extent to which the language of emotions in the banks’ annual reports is affected by the global financial crisis (GFC). The language of emotions was analyzed using eight categories (trust, anticipation, sadness, anger, fear, disgust, surprise and joy) in annual reports of 12 listed banks from six countries in the Middle East area (namely, Jordan, Kingdom of Bahrain, United Arab Emirates, Sultanate of Oman, Kuwait, Kingdom of Saudi Arabia) from 2002 to 2017. The final data set consists of 192 bank-year observations. The study time was divided into three periods (pre, during and post GFC). In addition, the study enriches accounting literature by being the first study to test Pollyanna hypothesis using emotion analysis. The results of the study show that the percentage of emotional words in banks’ annual reports (2002–2017) represents almost 22% on average. The trust, anticipation and fear categories were the most affected than other emotional categories during GFC. While the trust category decreased, both the fear and anticipation categories increased. Other findings of the study show that regardless of GFC, emotional words of trust and anticipation categories in banks’ annual reports have dominated the emotional words of the disgust and surprise categories. Therefore, Pollyanna hypothesis is supported. In contrast to the emotional words of the joy category in banks’ annual reports which has not dominated the sadness category. In this case, Pollyanna hypothesis is rejected.

view full abstract hide full abstract
    • Figure 1. The trend of all emotional words in banks’ annual reports (from 2002 to 2017)
    • Figure 2. The boxplot for each emotional category in banks’ annual reports (from 2002 to 2017)
    • Figure 3. The trend of the eight emotional categories in banks’ annual reports (from 2002 to 2017)
    • Table 1. Distribution of sample banks selected for the current study
    • Table 2. The percentage of overall emotional words in banks’ annual reports (from 2002 to 2017)
    • Table 3. The descriptive analysis of the eight categories of emotional words of sampled banks in the current study
    • Table 4. Wilcoxon rank-sum test for the emotional words of the trust and disgust categories
    • Table 5. Wilcoxon rank-sum test for the emotional words of the joy and sadness categories
    • Table 6. Wilcoxon rank-sum test for the emotional words of the anticipation and surprise categories
    • Table 7. Wilcoxon rank-sum test for the emotional words of the fear and anger categories
    • Table 8. The overall p-value using Wilcoxon rank-sum test (one-tail) for a whole sample in each period
    • Table A1. List of banks used in the current study