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More than words: Can tone of consumer product reviews help predict firms’ fundamentals?
dc.contributor.authorJin, Shunyao (Cynthia)
dc.date.accessioned2023-12-04T20:27:35Z
dc.date.available2024-11-04 15:27:33en
dc.date.available2023-12-04T20:27:35Z
dc.date.issued2023-10
dc.identifier.citationJin, Shunyao (Cynthia) (2023). "More than words: Can tone of consumer product reviews help predict firms’ fundamentals?." Journal of Business Finance & Accounting 50(9-10): 1910-1942.
dc.identifier.issn0306-686X
dc.identifier.issn1468-5957
dc.identifier.urihttps://hdl.handle.net/2027.42/191627
dc.description.abstractAlthough financial market participants are increasingly interested in the financial value of unstructured qualitative information regarding the prospects of a firm, empirical evidence remains sparse on the properties of qualitative content in consumer product reviews and their capital market implications. Using a broad sample of consumer reviews posted on Amazon.com, I examine whether the linguistic tone of aggregate consumer product reviews conveys information that is associated with firms’ sales, earnings, stock returns and risk. I find that aggregate review tone successfully predicts a firm’s forthcoming quarterly sales. Moderating analyses show that this predictability is stronger for firms operating in a highly competitive environment. I further find that review tone predicts a firm’s quarterly earnings surprises, abnormal stock returns and risk. A path analysis shows that the effect of review tone on stock prices is partially channeled through its effect on firms’ earnings. I finally find that negative review tone is more informative and useful than positive tone in predicting a firm’s fundamentals. Importantly, these results hold after controlling for other review characteristics, including review rating, review volumeand review dispersion. Overall, my findings highlight the importance of considering the tone of consumer reviews when evaluating a firm’s prospects and value.
dc.publisherAnchor Books
dc.publisherWiley Periodicals, Inc.
dc.subject.otherpath analysis
dc.subject.otherproduct market competition
dc.subject.otherstock returns
dc.subject.otherunstructured qualitative data
dc.subject.othertext mining
dc.subject.othercash flows
dc.subject.otherconsumer product reviews
dc.subject.otheridiosyncratic risk
dc.subject.othermachine learning
dc.subject.othermoderating analysis
dc.titleMore than words: Can tone of consumer product reviews help predict firms’ fundamentals?
dc.typeArticle
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelFinance
dc.subject.hlbtoplevelBusiness
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/191627/1/jbfa12680.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/191627/2/jbfa12680_am.pdf
dc.identifier.doi10.1111/jbfa.12680
dc.identifier.sourceJournal of Business Finance & Accounting
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dc.working.doiNOen
dc.owningcollnameInterdisciplinary and Peer-Reviewed


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