Chairperson Statement Tone, Firm Performance, and Valuation Across GCC Markets: A Comparative Study

This study investigates whether tone in Chairperson statements is associated with firm profitability and firm valuation across Gulf Cooperation Council (GCC) markets. Chairperson-statement tone is measured using the Loughran–McDonald financial sentiment dictionary, while firm profitability is measured using Return on Assets (ROA) and Profit Margin, and firm valuation is measured using the Market Value-to-Assets (MVA) ratio. The analysis uses an unbalanced panel covering 2021–2024, comprising 643 firm-year observations in the ROA specification and 607 in the Profit Margin specification. Using firm and year fixed-effects models, the findings provide mixed evidence of an association between profitability and Chairperson-statement tone. In the baseline specifications, ROA is not significantly associated with tone, while Profit Margin does show a positive association that is marginally significant. The strength and statistical significance of the profitability–tone associations vary across robustness and sensitivity specifications, indicating sensitivity to model specification and sample composition. Cross-country analysis indicates heterogeneity in the ROA–tone relationship, although the strength of this evidence is sensitive to country composition, while no systematic cross-country heterogeneity is found for Profit Margin. Chairperson-statement tone is not significantly associated with firm valuation, and the MVA specifications provide no evidence of systematic cross-country heterogeneity. Overall, the findings document heterogeneous and specification-sensitive associations between profitability and narrative tone across GCC markets. These associations are compatible with both signalling and impression management interpretations, although the research design does not distinguish between these alternative mechanisms.