The dual-assurance text strategy: how oil price volatility drives a two-pole narrative response in corporate communication

Xi Wu, Zicheng Pan and Ying Wu

Accounting Research Journal, 2026, vol. 39, issue 6, 1042-1060

Abstract: PurposeThis study aims to investigate how firms adjust corporate narratives in response to oil price volatility. While prior research focuses on one-dimensional textual sentiment, the authors introduce a “dual-assurance text strategy” framework capturing the synergistic use of textual optimism and textual certainty. They examine whether oil price volatility triggers this strategy, which firms adopt it and when the market finds such narratives credible.Design/methodology/approachUsing Chinese listed firms from 2012 to 2022, the authors measure textual optimism and certainty via sentiment analysis of MD&A sections using established Chinese dictionaries. Oil price volatility is the sum of squared daily Brent returns. They use seemingly unrelated regressions with jackknife clustering to capture the coordinated use of both textual dimensions. Subsample analyses examine heterogeneous responses, and event study models test market reactions conditional on credibility signals.FindingsOil price volatility increases firms’ adoption of the dual-assurance text strategy. Vulnerable firms adopt it defensively for survival, while robust firms use it offensively for competitive advantage. The market rewards these narratives only when firms establish credibility through appropriate signals. For vulnerable firms, debt covenants serve as credible signals; for robust firms, cash holdings and dividend payouts fulfill this role.Originality/valueThis study advances disclosure research by introducing a two-dimensional framework that moves beyond one-dimensional sentiment analysis. It reveals how financial condition shapes narrative motives and provides investors a practical tool to assess narrative credibility based on firm-specific conditions.

Keywords: Dual-assurance text strategy; Oil price volatility; Corporate narrative; Textual strategy; Narrative credibility (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-03-2026-0240

DOI: 10.1108/ARJ-03-2026-0240

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