A Text Analysis Approach for Assessing Annual Report Quality: A Comparative Case Study of Vietnamese and Chinese Companies
DOI:
https://doi.org/10.54097/x5ab9e71Keywords:
Text analysis, Annual report quality, Corporate disclosure, Vietnam, China, Multi-Criteria Decision Making, Banking sectorAbstract
This study develops and validates a multidimensional framework for assessing corporate annual report quality through advanced text analysis, with a comparative focus on Vietnam and China, two dynamic yet institutionally distinct emerging markets. Leveraging a corpus of 60 English-language annual reports (2020–2024) from listed companies across seven industries, we extract 13 textual indicators spanning readability, sentiment, thematic focus, and disclosure volume. These indicators are integrated into an Annual Report Quality Index (ARQI) using a Multi-Criteria Decision Making (MCDM) framework that combines the Entropy Weight method for objective indicator weighting and the PROMETHEE method for nonlinear ranking. A two-tier research design enables both cross-industry characterization and a focused intra-industry banking case study, where three systemically important banks from each country are compared. Results reveal significant disparities: Chinese banks demonstrate consistently higher and more stable ARQI scores, reflecting greater institutional maturity under the China Securities Regulatory Commission (CSRC) framework. Vietnamese banks exhibit greater volatility but a clear upward convergence trend, particularly after 2022, suggesting adaptive responses to evolving disclosure regulations such as Circular 22/2019/TT-BTC. Component-level analysis shows that Chinese reports excel in risk transparency, sentiment stability, and thematic integration, while Vietnamese reports demonstrate emerging strengths in sustainability and digital transformation narratives. An internal consistency test confirms strong alignment between ARQI scores and task group assessments (Pearson’s r = 0.927, p < 0.001), validating the index’s reliability. This study contributes a scalable, replicable methodology for assessing narrative disclosure quality and provides empirical evidence on how institutional contexts shape corporate communication in emerging Asian economies. The ARQI framework offers practical utility for investors seeking transparent information, corporate managers aiming to benchmark reporting practices, and regulators striving to enhance market transparency.
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