Mission statements of Latin-American firms: content analysis, readability, and their effect on financial performance

Julián David Cortés-Sánchez and Liliana Rivera
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Julián David Cortés-Sánchez: Universidad del Rosario

No j23ds, SocArXiv from Center for Open Science

Abstract: Mission statements (MSs) are one of the most widespread managerial practices. However, a deeper understanding of the relationship between MS characteristics and a firm’s financial performance is needed. This study proposes a qualitative and quantitative analysis of MS characteristics (i.e., key words and readability) for Latin-American firms and their relationship to financial performance. MS content is evaluated using content analysis software, and the relationship between MS readability and financial performance is examined using regression analysis. The results of the content analysis suggest differences among industries and an international trend toward isomorphism regarding key terms. The results of the quantitative analysis revealed a positive relationship between MS readability and return on assets and return on equity. These results suggest a positive impact of the MS on a company’s long-term financial performance, highlighting the importance of having a readable MS.

Date: 2018-11-10
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:j23ds

DOI: 10.31219/osf.io/j23ds

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