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Financial Innovation

Table 2 Correlation matrix

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

 

EM

Positive

Negative

Uncertainty

Litigious

Modal1

Modal2

Modal3

Irr_verb

LEV

LNSIZE

CH

REV

CF

ROA

EM

1

              

Positive

0.196***

1

             

Negative

0.029

0.763***

1

            

Uncertainty

0.169***

0.895***

0.756***

1

           

Litigious

-0.009

0.420***

0.767***

0.344***

1

          

Strongml

0.092*

0.841***

0.750***

0.807***

0.457***

1

         

Moderml

0.132**

0.887***

0.732***

0.883***

0.364***

0.846***

1

        

Weakml

0.170***

0.869***

0.787***

0.954***

0.419***

0.745***

0.830***

1

       

Irrverb

0.028

0.668***

0.757***

0.670***

0.695***

0.747***

0.689***

0.607***

1

      

LEV

− 0.004

− 0.197***

− 0.235***

− 0.261***

− 0.174***

− 0.191***

− 0.272***

− 0.284***

− 0.115**

1

     

LNSIZE

0.208***

− 0.258***

− 0.179***

− 0.219***

− 0.042

− 0.138**

− 0.263***

− 0.339***

0.106**

0.417***

1

    

CH

0.008

0.199***

0.337***

0.220***

0.294***

0.181***

0.199***

0.324***

0.079*

− 0.435***

− 0.523***

1

   

REV

0.162***

0.087**

0.108**

0.029

0.172***

0.052

0.048

0.077

0.113**

0.019

− 0.061

0.119**

1

  

CF

− 0.135***

0.026

0.032

0.022

0.110**

0.089*

0.050

0.016

0.148**

− 0.086**

0.254***

0.124**

0.236***

1

 

ROA

0.049

0.119**

0.009

0.106**

0.055

0.137***

0.121**

0.095

0.150

− 0.192

0.147**

0.111**

0.251***

0.755***

1

  1. This table reports the correlation matrix of selected variables. The sample includes 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
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