Tone of language, financial disclosure, and earnings management: a textual analysis of form 20-F

Financial Innovation

Table 1 Summary of descriptive statistics

Variable	Mean	Mean (Year < 2008)	Mean (Year ≥ 2008)	Median	Minimum	Maximum	SD
EM	0.030	0.025	0.031	0.017	0.000	0.341	0.040
Positive	0.003	0.004	0.003	0.003	0.000	0.008	0.001
Negative	0.007	0.009	0.007	0.007	0.001	0.017	0.003
Uncertainty	0.006	0.007	0.006	0.005	0.002	0.012	0.002
Litigious	0.007	0.009	0.006	0.006	0.001	0.030	0.004
Strongml	0.002	0.002	0.002	0.002	0.000	0.004	0.001
Moderml	0.001	0.002	0.001	0.001	0.000	0.003	0.001
Weakml	0.003	0.004	0.003	0.003	0.001	0.007	0.002
Irrverb	0.003	0.005	0.003	0.004	0.001	0.009	0.001
LP	0.490	0.005	0.493	0	0	1	0.500
FN	0.350	0.605	0.289	0	0	1	0.477
AOT	0.976	0.988	0.973	1	0	1	0.155
BIG4	0.846	0.919	0.829	1	0	1	0.361
LEV	0.387	0.322	0.403	0.355	0.021	0.952	0.209
LNSIZE	3.034	3.125	3.012	2.779	1.025	5.589	0.927
CH	0.247	0.300	0.234	0.173	0.003	0.898	0.223
REV	0.285	0.431	0.251	0.204	− 0.860	4.064	0.480
CF	0.086	0.137	0.074	0.081	− 0.441	0.442	0.111
ROA	0.032	0.077	0.021	0.036	− 0.555	0.368	0.108

This table reports the summary of descriptive statistics of the sample including 75 U.S.-listed Chinese companies during 2002–2014.The total number of observations is 449. The sample is obtained from the S&P Capital IQ and supplemented from the Wind Database. LP is a dummy for listing place, FN is a dummy for state-owned enterprise, AOT is a dummy for auditor going concern, and BIG4is a dummy for Big 4 auditing firms. LEVis the ratio of total debt to total assets. LNSIZE is the logarithm of firm’s total assets. CH is the ratio of cash to total assets. REV is the change in sales. CF is the ratio of cash from operating to total assets. ROA is return on assets. Positive, negative, uncertain, litigious, strong modal, moderate modal, weak modal, and irregular verbs are the eight categories of wordlist defined from the 2014 Master Dictionary of McDonald and Loughran and McDonald (2011) word list