Possibilities of standardised evaluation of textual data of the management report in the context of qualitative creditworthiness analysis

Abstract

Companies produce corporate publications due to legal requirements, but also in particular to reduce information asymmetries. Companies will have to prepare their financial statements taking sustainability aspects into account. This influence can be analysed in future analyses. The publication of this information often leads to a reaction from investors. Previously published studies have shown a correlation between the textual sentiment of corporate publications and securities returns. These studies have focused particularly on the US region. Consequently, this paper can selectively fill the research gap for the German-speaking region. Therefore, it is an academically relevant topic. In this study, companies from the Prime Standard stock market segment for 2018 were examined to determine whether there is a correlation between the textual sentiment of the management report and the company's credit rating. It is found that there is a significant relationship between the negative sentiment and the word count on credit risk.