The Value Relevance of Textual Analysis

Value relevance literature that we reviewed in Chap. 2 and textual analysis literature reviewed in Chap. 4 evolve in tandem with the dynamic trends of the global economy. In this chapter, we focus on the empirical intersection between value relevance and textual analysis, exploring how non-financial information such as tone and readability are empirically linked to market reactions and firm valuation. In this chapter, we introduce the readers to the academic literature, highlighting key discoveries and ongoing debates that have shaped our understanding of how textual information integrates with traditional financial metrics to enhance firm valuation.