Disclosure Sentiment: Machine Learning vs. Dictionary Methods

Richard Frankel
Richard Frankel
[email protected]
https://orcid.org/0000-0001-6736-0738
Olin Business School, Washington University in St. Louis, St. Louis, Missouri 63130
Search for more papers by this author
,
Jared Jennings
Jared Jennings
[email protected]
https://orcid.org/0000-0002-3658-4779
Olin Business School, Washington University in St. Louis, St. Louis, Missouri 63130
Search for more papers by this author
,
Joshua Lee
Joshua Lee
[email protected]
https://orcid.org/0000-0001-7303-6029
Marriott School of Business, Brigham Young University, Provo, Utah 84602
Search for more papers by this author

Olin Business School, Washington University in St. Louis, St. Louis, Missouri 63130

Search for more papers by this author

Jared Jennings

[email protected]

https://orcid.org/0000-0002-3658-4779

Olin Business School, Washington University in St. Louis, St. Louis, Missouri 63130

Search for more papers by this author

Joshua Lee

[email protected]

https://orcid.org/0000-0001-7303-6029

Marriott School of Business, Brigham Young University, Provo, Utah 84602

Search for more papers by this author

Published Online:11 Nov 2021https://doi.org/10.1287/mnsc.2021.4156

Supplemental Material

mnsc.2021.4156.sm1.pdf

The replication files for this article are available HERE.

Cited by
- Can environmental courts inhibit corporate greenwash? Evidence from heterogeneous LLMs
  International Review of Economics & Finance, Vol. 110
- Understanding peer effects in intelligent manufacturing transformation: The roles of competitive and informational motives
  Information Processing & Management, Vol. 63, No. 5
- Topic Modeling in Finance: A Review of Methods, Applications, and Challenges
  30 May 2026 | Journal of Risk and Financial Management, Vol. 19, No. 6
- Bottom up vs. top down: What does firm 10-K tell us?
  Journal of Financial Markets, Vol. 79
- Can news predict firm bankruptcy?
  Journal of Financial Markets, Vol. 79
- The impact of multi-aspect electronic word-of-mouth on movie box office: An exploration study based on large language models
  Decision Support Systems, Vol. 18
- Investment mismatch in mutual funds: short-term gains and distorted flows
  25 May 2026 | Applied Economics Letters, Vol. 483
- The Textual Tone of Annual Reports and Market Attention: Evidence From Chinese Listed Companies
  3 April 2026 | Managerial and Decision Economics, Vol. 23
- Investor opinion formation and the distribution of stock returns
  24 May 2025 | Journal of Behavioral Finance, Vol. 27, No. 2
- Deep Information Retrieval Using Neural Language Models for Accounting Research: An Illustration Using Press News
  12 December 2025 | Journal of Corporate Accounting & Finance, Vol. 37, No. 2
- Non-English textual analysis with large language models: Analysts’ use of MD&A sentiment in earnings forecasting
  Journal of Contemporary Accounting & Economics, Vol. 22, No. 1
- Critical Audit Matters and SEC Filing Review
  14 December 2025 | International Journal of Auditing, Vol. 30, No. 2
- Do emotions matter? The impact of managerial emotion profiles on stock returns
  12 January 2026 | Pacific Accounting Review, Vol. 38, No. 2
- The Value of Values: Does Focusing on Sustainability Provide a Competitive Advantage in Forecasting Earnings?
  19 March 2026 | Contemporary Accounting Research, Vol. 65
- From Words to Actions: Can Companies Hear the Digital Voices of Retail Investors?
  16 March 2026 | Emerging Markets Finance and Trade
- Tracking Climate and Environmental Attention: A News‐Based Composite Index
  9 March 2026 | Corporate Social Responsibility and Environmental Management, Vol. 2008
- FinTextSim: a domain-specific sentence-transformer for extracting predictive latent topics from financial disclosures
  2 March 2026 | Frontiers in Artificial Intelligence, Vol. 9
- Unlocking knowledge-sharing live streaming e-commerce: An LLM-empowered analytics framework for book sales prediction
  Information Processing & Management, Vol. 63, No. 2
- Media Sentiment and Price Run‐Ups
  30 October 2025 | European Financial Management, Vol. 32, No. 2
- Artificial Intelligence Applications and Dividends: Evidence from China
  26 February 2026 | Asia-Pacific Financial Markets, Vol. 34
- Does Disclosure Tone Reflect REIT Managerial Sentiment? An Investigation
  11 February 2026 | Journal of Real Estate Portfolio Management, Vol. 73
- Firm digitalization and bank lending: Evidence from China
  Research in International Business and Finance, Vol. 82
- Learning from Earnings Calls: Graph-Based Conversational Modeling for Financial Prediction
  Yi Yang,
  Yixuan Tang,
  Yangyang Fan,
  Kunpeng Zhang
  16 January 2026 | Information Systems Research, Vol. 0, No. 0
- Consentient Votes With Reservation: Independent Directors’ Signaling Efforts
  7 January 2026 | Journal of Accounting, Auditing & Finance, Vol. 29
- Impression management, government agencies' regulation and analyst forecasts: empirical evidence from an emerging market
  2 January 2026 | Asian Review of Accounting, Vol. 53
- Sentiment and Emotion Analysis in Marketing, Lexicons, Machine Learning, and Aspect-Based Methods
  26 September 2025
- Language of images: Classifying marketing images with transformers and vision language models
  International Journal of Research in Marketing, Vol. 88
- Uncertainty words and corporate information environment
  Research in International Business and Finance, Vol. 81
- Risk Factor Extraction in Financial Disclosures via a Knowledge Graph–Enhanced Language Model
  16 February 2026 | International Journal of Intelligent Systems, Vol. 2026, No. 1
- Customer Data and Cost Structure: Evidence from Data Privacy Regulation
  1 January 2026 | SSRN Electronic Journal, Vol. 30
- An Efficient BERT-Based Algorithm for Extracting Opinion Targets from Financial News
  28 October 2025
- The Impact of AI Risk Sentiment on Stock Market Reactions to DeepSeek_R1
  9 December 2025 | Journal of Behavioral Finance, Vol. 35
- Identifying Going Concern Audit Opinions Using Supervised Machine Learning
  14 October 2025 | Intelligent Systems in Accounting, Finance and Management, Vol. 32, No. 4
- Deep learning, textual sentiment, and financial market
  7 June 2024 | Information Technology and Management, Vol. 26, No. 4
- Communication of ECB Governing Council members: Impact on intraday financial markets from media messages
  Journal of Behavioral and Experimental Finance, Vol. 48
- AI reshaping financial modeling
  1 October 2025 | npj Artificial Intelligence, Vol. 1, No. 1
- Dynamic monitoring and early warning of public emotional perception of risk during extreme rainstorm disasters: A study based on social media
  17 December 2025 | Applied Psychology: Health and Well-Being, Vol. 17, No. 6
- THE INFORMATION POWER OF SOCIAL MEDIA FOR INVESTMENT DECISIONS: AN AI-DRIVEN ANALYSIS OF REDDIT POSTS
  13 December 2025 | Journal of Financial Management, Markets and Institutions, Vol. 13, No. 02
- Executive positioning of EURO STOXX 50® CEOs and CFOs on LinkedIn: implications for financial communication
  29 September 2025 | Corporate Communications: An International Journal, Vol. 30, No. 6
- From Rules to Flexibility: A Resource and Method for SEC Item Extraction in Post-2021 10-K Filings
  10 November 2025
- The News in Earnings Announcement Disclosures: Capturing Word Context Using LLM Methods
  Federico Siano
  7 April 2025 | Management Science, Vol. 71, No. 11
- Intraday Trading Dynamics of Characteristics and Sentiment Tendencies of Past News in the Tokyo Stock Exchange Market
  9 January 2025 | Computational Economics, Vol. 66, No. 5
- Does Climate Risk Affect Management Sentiment?
  18 June 2025 | Kyklos, Vol. 78, No. 4
- Unlocking disclosure narratives: readability, length, and sentiment cues as indicators of bankrupt Japanese companies
  5 October 2025 | Asia-Pacific Journal of Accounting & Economics, Vol. 33
- (Generative) AI in Financial Economics
  24 October 2025 | Journal of Chinese Economic and Business Studies, Vol. 23, No. 4
- Thirty Years of Change: The Evolution of Classified Boards
  22 August 2025 | The Journal of Finance, Vol. 80, No. 5
- Impact of Green Transformation on Corporate Sustainable Development Performance in China
  24 December 2025 | Sage Open, Vol. 15, No. 4
- Knowledge Discovery in Intelligent Business Systems：Current Research and Future Directions
  6 November 2025 | Bulletin of National Natural Science Foundation of China, Vol. 39, No. 5
- A multimodal sentiment classifier for financial decision making
  International Review of Financial Analysis, Vol. 105
- Digital innovation and supply chain risk: A large language model-based analysis
  Pacific-Basin Finance Journal, Vol. 92
- Emotion contagion and stock market: the role of online investor network in China
  17 July 2024 | Applied Economics, Vol. 57, No. 39
- Does political risk exacerbate climate risk? Firm-level evidence
  International Review of Financial Analysis, Vol. 104
- The impact of generative AI on information processing: Evidence from the ban of ChatGPT in Italy
  Journal of Accounting and Economics, Vol. 80, No. 1
- Decoding risk sentiment in 10-K filings: Predictability for U.S. stock indices
  Finance Research Letters, Vol. 81
- Unveiling themes in 10-K disclosures: A new topic modeling perspective
  International Review of Financial Analysis, Vol. 103
- Textual analysis and credit scoring: a new matrix factorization approach
  22 October 2024 | Journal of the Operational Research Society, Vol. 76, No. 6
- Investor sentiment and stock returns: Wisdom of crowds or power of words? Evidence from Seeking Alpha and Wall Street Journal
  Journal of Financial Markets, Vol. 74
- Probing the intrinsic mechanism and evolution characteristics of online shopping customer satisfaction via text mining of online reviews
  7 May 2025 | PLOS One, Vol. 20, No. 5
- CareerBERT: Matching resumes to ESCO jobs in a shared embedding space for generic job recommendations
  Expert Systems with Applications, Vol. 275
- The Financial Institution Text Data Mining and Value Analysis Model Based on Big Data and Natural Language Processing
  Journal of Organizational and End User Computing, Vol. 37, No. 1
- Finance-specific large language models: Advancing sentiment analysis and return prediction with LLaMA 2
  Pacific-Basin Finance Journal, Vol. 90
- Predicting ESG disclosure quality through board secretaries' characteristics: A machine learning approach
  Research in International Business and Finance, Vol. 76
- Dissecting climate change risk and financial market instability: Implications for ecological risk management
  30 December 2023 | Risk Analysis, Vol. 45, No. 3
- Quantifying Social Justice in Energy Transition: A Policy-Driven Assessment Framework for China
  14 March 2025 | Systems, Vol. 13, No. 3
- Corporate tax avoidance and narrative disclosure tone: a developing country perspective
  22 October 2024 | Meditari Accountancy Research, Vol. 33, No. 1
- Embracing market dynamics in the post-COVID era: A data-driven analysis of investor sentiment and behavioral characteristics in stock index futures returns
  Omega, Vol. 131
- Sentiment-devoid lexicons: A novel method for domain-specific textual analysis in business and governance documents
  Information & Management, Vol. 62, No. 1
- From online reviews to smartwatch recommendation: An integrated aspect-based sentiment analysis framework
  Journal of Retailing and Consumer Services, Vol. 82
- Generative language models exhibit social identity biases
  12 December 2024 | Nature Computational Science, Vol. 5, No. 1
- Impression Management: AI-based Evidence from Earnings Guidance 
  1 January 2025 | SSRN Electronic Journal, Vol. 29
- The Impact of Generative AI on Information Processing: Evidence from the Ban of ChatGPT in Italy
  1 January 2025 | SSRN Electronic Journal, Vol. 76
- A Firm’s Operational Risk: Data Set and Empirical Evidence
  1 January 2025 | SSRN Electronic Journal, Vol. 24
- (Generative) AI in Financial Economics
  1 January 2025 | SSRN Electronic Journal, Vol. 37
- Media Narratives on Foreign Countries and Cross-Border Mergers and Acquisitions
  1 January 2025 | SSRN Electronic Journal, Vol. 117
- Measuring Quality
  1 January 2025 | SSRN Electronic Journal, Vol. 46
- The Natural Language of Finance
  5 December 2024 | Foundations and Trends® in Finance, Vol. 14, No. 4
- The impact of carbon transition risk concerns on stock market cycles: Evidence from China
  Technological Forecasting and Social Change, Vol. 209
- Sentiment-semantic word vectors: A new method to estimate management sentiment
  13 August 2024 | Swiss Journal of Economics and Statistics, Vol. 160, No. 1
- Belief dispersion in the Chinese stock market and fund flows
  Journal of Banking & Finance, Vol. 166
- Sentiment Analysis on Digital Transformation Announcements with Dictionary Method, Machine Learning, and Large Language Models
- Does management tone matter in information disclosure? Evidence from IPO online roadshows in the SSE STAR market
  International Review of Financial Analysis, Vol. 94
- Using Negations in Analyzing German Texts in Finance
  5 April 2024 | Credit and Capital Markets – Kredit und Kapital
- Sentiment trading with large language models
  Finance Research Letters, Vol. 62
- Predicting M&A targets using news sentiment and topic detection
  Technological Forecasting and Social Change, Vol. 201
- The Disclosure Tone, Earnings Management, Earnings Quality: Evidence Found in Indonesia Listed Manufacturing Industry
  22 March 2024 | KnE Social Sciences
- Financial statement adequacy and firms' MD&A disclosures
  18 January 2024 | Contemporary Accounting Research, Vol. 41, No. 1
- Impacts of Investor Attention and Accounting Information Comparability on Stock Returns: Empirical Evidence from Chinese Listed Companies
  14 February 2024 | International Journal of Financial Studies, Vol. 12, No. 1
- The Effects of Sentiment Evolution in Financial Texts: A Word Embedding Approach
  19 February 2024 | Journal of Management Information Systems, Vol. 41, No. 1
- Earnings Call Transcripts as a Source and Resource for Information Systems Research
  21 May 2024
- SPCM: A Machine Learning Approach for Sentiment-Based Stock Recommendation System
  IEEE Access, Vol. 12
- WhiteBox inside Blackbox: Using interpretable language models to analyze financial narratives 
  1 January 2024 | SSRN Electronic Journal, Vol. 53
- Supply Chain Risk: Estimate and economic implications
  1 January 2024 | SSRN Electronic Journal, Vol. 118
- Sentiment-semantic word vectors - A new method to estimate management sentiment
  1 January 2024 | SSRN Electronic Journal, Vol. 34
- Bottom Up vs Top Down: What Does Firm 10-K Tell Us?
  1 January 2024 | SSRN Electronic Journal, Vol. 21
- The Value of Values: Does Focusing on Sustainability Provide a Competitive Advantage in Forecasting Earnings?
  1 January 2024 | SSRN Electronic Journal, Vol. 65
- Federal policy announcements and capital reallocation: Insights from inflow and outflow trends in the U.S.
  Journal of International Money and Finance, Vol. 139
- CentralBankRoBERTa: A fine-tuned large language model for central bank communications
  The Journal of Finance and Data Science, Vol. 9
- Public attitudes towards dialects: Evidence from 31 Chinese provinces
  12 October 2023 | PLOS ONE, Vol. 18, No. 10
- Speech emotion recognition and text sentiment analysis for financial distress prediction
  20 March 2023 | Neural Computing and Applications, Vol. 35, No. 29
- A Practical Guide to Conversation Research: How to Study What People Say to Each Other
  13 November 2023 | Advances in Methods and Practices in Psychological Science, Vol. 6, No. 4
- Let’s talk about risk! Stock market effects of risk disclosure for European energy utilities
  Energy Economics, Vol. 125
- News-based sentiment and the value premium
  Journal of International Money and Finance, Vol. 136
- Using Negations in Analyzing German Texts in Finance
  1 July 2023 | Credit and Capital Markets – Kredit und Kapital, Vol. 56, No. 3-4
- Textual Analysis in Accounting: What's Next?*
  7 December 2022 | Contemporary Accounting Research, Vol. 40, No. 2
- FinBERT : A Large Language Model for Extracting Information from Financial Text*
  6 January 2023 | Contemporary Accounting Research, Vol. 40, No. 2
- Unlocking the Power of Voice for Financial Risk Prediction: A Theory-Driven Deep Learning Design Approach
  1 March 2023 | MIS Quarterly, Vol. 47, No. 1
- Incorporating financial news for forecasting Bitcoin prices based on long short-term memory networks
  12 October 2022 | Quantitative Finance, Vol. 23, No. 2
- Artificial Intelligence in Accounting and Finance: Challenges and Opportunities
  IEEE Access, Vol. 11
- Identifying M&A Targets from Textual Disclosures: A Transformer Neural Network Approach
  1 January 2023 | SSRN Electronic Journal, Vol. 30
- Payment Firms, Cryptocurrencies, and CBDCs
  1 January 2023 | SSRN Electronic Journal, Vol. 130
- Bloated Disclosures: Can ChatGPT Help Investors Process Information?
  1 January 2023 | SSRN Electronic Journal, Vol. 5
- Media Negativity on Foreign Countries and International Asset Allocation
  1 January 2023 | SSRN Electronic Journal, Vol. 69
- Investor Opinion Formation and the Distribution of Stock Returns
  1 January 2023 | SSRN Electronic Journal, Vol. 78
- Using a Large Language Model for Accounting Topic Classification
  1 January 2023 | SSRN Electronic Journal, Vol. 95
- Do Emotions Matter? The Role of Manager Emotions on Stock Returns
  1 January 2023 | SSRN Electronic Journal, Vol. 15
- From Transcripts to Insights: Uncovering Corporate Risks Using Generative AI
  1 January 2023 | SSRN Electronic Journal, Vol. 131
- Text-Based Technological Risk and Firm Innovation: An Empirical Analysis
  1 January 2023 | SSRN Electronic Journal, Vol. 108
- Textual Changes in 10-Ks and Stock Price Crash Risk: Evidence from Neural Network Embeddings
  1 January 2023 | SSRN Electronic Journal, Vol. 51
- Contextualized Sentiment Analysis using Large Language Models
  1 January 2023 | SSRN Electronic Journal, Vol. 33
- Observing the Unobservable: Connecting Persistent Emotional State to Behavior in Risky Contexts
  1 January 2023 | SSRN Electronic Journal, Vol. 34
- ESG washing: when cheap talk is not cheap!
  1 January 2023 | SSRN Electronic Journal, Vol. 38
- Does media sentiment affect stock prices? Evidence from China’s STAR market
  1 December 2022 | Frontiers in Psychology, Vol. 13
- Financial Report Readability and Accounting Conservatism
  11 October 2022 | Journal of Risk and Financial Management, Vol. 15, No. 10
- Cheap Talk in Corporate Climate Commitments: The Role of Active Institutional Ownership, Signaling, Materiality, and Sentiment
  SSRN Electronic Journal, Vol. 13
- How Cheap Talk in Climate Disclosures relates to Climate Initiatives, Corporate Emissions, and Reputation Risk
  1 January 2022 | SSRN Electronic Journal, Vol. 13
- Thirty Years of Change: The Evolution of Classified Boards
  1 January 2022 | SSRN Electronic Journal, Vol. 95
- Performance of Automated Image Classification
  SSRN Electronic Journal, Vol. 88
- COVID-19 Vaccine Fact-Checking Posts on Facebook: Observational Study
  21 June 2022 | Journal of Medical Internet Research, Vol. 24, No. 6
- Investor Sentiment, Media and Stock Returns: The Advancement of Social Media
  SSRN Electronic Journal, Vol. 53
- Financial Statement Adequacy and Firms’ MD&A Disclosures
  SSRN Electronic Journal, Vol. 22
- Estimating the Likelihood of Future Tax Settlements Using Firm Fundamentals and Text Disclosures
  SSRN Electronic Journal, Vol. 99
- Let's Talk About Risk! The Firm Value Effect of Risk Disclosure for European Energy Utilities
  SSRN Electronic Journal, Vol. 39
- FinBERT—A Deep Learning Approach to Extracting Textual Information
  SSRN Electronic Journal, Vol. 6

Volume 68, Issue 7

July 2022

Pages 4755-5555, iv-v

Article Information

Supplemental Material

Metrics

Information

Received:January 15, 2020
Accepted:May 13, 2021
Published Online:November 11, 2021

Cite as

Richard Frankel, Jared Jennings, Joshua Lee (2021) Disclosure Sentiment: Machine Learning vs. Dictionary Methods. Management Science 68(7):5514-5532.

https://doi.org/10.1287/mnsc.2021.4156

Keywords

PDF download

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Disclosure Sentiment: Machine Learning vs. Dictionary Methods

Supplemental Material

Volume 68, Issue 7

Article Information

Supplemental Material

Metrics

Information

Cite as

Keywords

Sign Up for INFORMS Publications Updates and News