Over-optimistic Expectations, Corporate Risk-taking, and R&D Investment—A Study Based on Natural Language Processing

Lingyu Li and Qing Wu

Chapter 61 in Internet Finance and Digital Economy:Advances in Digital Economy and Data Analysis Technology, 2023, pp 821-832 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper investigates the relationship between management over-optimism, corporate risk-taking, and R&D investment by using natural language processing technology. This paper uses Python 3.9 to extract the frequency of optimistic words to measure the emotion of management in the text. The results of the Stata 16.0 analysis indicate a significant positive correlation between management’s overly optimistic expectations and R&D investment and how corporate risk-taking mediates this relationship.

Keywords: Internet Economy; Online Finance; Financial Engineering; Big Data; Blockchain; Supply Chain; E-commerce (search for similar items in EconPapers)
JEL-codes: G2 O33 (search for similar items in EconPapers)
Date: 2023
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