Competitive Strategy and Earnings Quality: An Empirical Study Based on Text Analysis

Abstract

Abstract: This paper employs Word2Vec natural language processing method to construct the competitive strategy index in China's scenario, then on such a basis it conducts an empirical test on the relationship between competitive strategy, earnings quality and life cycle. The findings show that the enterprises implementing differentiation strategy have more persistent and less volatile earnings. Viewing from the different stages of enterprise life cycle, such phenomenon is more pronounced in the enterprises at the mature and vibrating stages. In addition, in the policy context of The Outline of the National Program for Long-and-Medium-Term Scientific and Technological Development (2006-2020), the enterprises' strategy transition has strengthened their earnings persistence, which verifies the effectiveness of the policy.

Key words: competitive strategy, earnings quality, life cycle of enterprises

CLC Number:

F272.3

HU Nan, QIU Fang-juan, LIANG Peng. Competitive Strategy and Earnings Quality: An Empirical Study Based on Text Analysis[J]. Contemporary Finance & Economics, 2020, 0(9): 138-148.

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