A Topic Modelling Method for Automated Text Analysis of the Adoption of Enterprise Risk Management

Hao Lu, Xiaoyu Liu, Hai Wang

2023

Abstract

This paper presents a topic modelling method for automated text analysis of the adoption of enterprise risk management by publicly traded firms. The topic modelling method applies the Latent Dirichlet Allocation algorithm on corporate annual financial disclosures to identify whether firms have adopted enterprise risk management. The preliminary results indicate that the firms that have adopted enterprise risk management have a smaller reduction in daily abnormal returns during the recession period of the COVID-19 financial market shock in 2020 (the first quarter of 2020 when the stock market crashed) and a larger increase in daily abnormal returns during the recovery period (the second and third quarters of 2020 when the stock market recovered). Moreover, there is no evidence that the adoption of enterprise risk management reduces the volatility of stock returns of publicly traded firms during the COVID-19 financial market shock in 2020.

Paper Citation

in Harvard Style

Lu H., Liu X. and Wang H. (2023). A Topic Modelling Method for Automated Text Analysis of the Adoption of Enterprise Risk Management. In Proceedings of the 18th International Conference on Software Technologies - Volume 1: ICSOFT; ISBN 978-989-758-665-1, SciTePress, pages 456-462. DOI: 10.5220/0012118500003538

in Bibtex Style

@conference{icsoft23,
author={Hao Lu and Xiaoyu Liu and Hai Wang},
title={A Topic Modelling Method for Automated Text Analysis of the Adoption of Enterprise Risk Management},
booktitle={Proceedings of the 18th International Conference on Software Technologies - Volume 1: ICSOFT},
year={2023},
pages={456-462},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0012118500003538},
isbn={978-989-758-665-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 18th International Conference on Software Technologies - Volume 1: ICSOFT
TI - A Topic Modelling Method for Automated Text Analysis of the Adoption of Enterprise Risk Management
SN - 978-989-758-665-1
AU - Lu H.
AU - Liu X.
AU - Wang H.
PY - 2023
SP - 456
EP - 462
DO - 10.5220/0012118500003538
PB - SciTePress