Text Analysis of Marketing Language in Financial Earnings Call

Transcripts

Abstract

Earnings calls provide an opportunity to present a company’s financial results, but they are also used to sell investors on the company’s future success. When and how frequently marketing is referenced during earnings calls remains an open question. We develop a marketing term dictionary to use for text analysis within financial contexts. Employing this dictionary, we conduct a text analysis of over 130,000 earnings call transcripts from 2001-2020, exploring how frequently marketing terms are used, the underlying sentiment that accompanies marketing term usage, and how marketing terms relate to objective company performance metrics such as earnings per share (EPS). We demonstrate that in general, marketing terms are positively associated with positive sentiment, inversely associated with negative sentiment, and positively associated with higher firm performance, with stronger effects for consumer focused and marketing-centric companies.

Project Organization

• /code Scripts with prefixes (e.g., 01_import-data.R, 02_clean-data.R) and functions in /code/src.
• /data Simulated and real data, the latter not pushed.
• /figures PNG images and plots.
• /output Output from model runs, not pushed.
• /presentations Presentation slides.
• /private A catch-all folder for miscellaneous files, not pushed.
• /renv Project library, once initialized (see below).
• /writing Case studies and the paper.
• renv.lock Information on the reproducible environment.

Reproducible Environment

Every package you install lives in your system library, accessible to all projects. However, packages change. Add a reproducible environment by creating a project library using the {renv} package.

• Initialize the project library once using renv::init().
• Once you’ve installed packages, add them to the project library using renv::snapshot().
• If a project library already exists, install the associated packages with renv::restore().

For more details on using GitHub, Quarto, etc. see Research Assistant Training.