Question-Statistical approach

[Catalin Mos]

Dear team,

I received an interesting comment from a reviewer of my paper. My paper deals with the effects of uncertainty (independent variable) on financial reporting (dependent variable). My sample consists of firms from 21 countries between 2005-2022.
The comment that I received is "Maybe you can think of an interesting setting where, in the same macroeconomic conditions, some companies from an industry have incentives to improve their FRQ and some to obfuscate the information in their annual reports". Do you have any idea of an approach that I could use in Stata to test this?

Many thanks for your support!

[George Ford]

There's some work on this (e.g., https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7148857/), but not sure any of it uses the financial data itself to measure it (looks like readability, # reported earnings measures, and so forth). All that would require a textual analysis.