Optimistic disclosure tone in corporate annual reporting and financial performance

The paper investigates the association between optimistic disclosure tone and corporate financial performance using a sample of listed firms in Gulf Cooperation Council (GCC) countries covering the period from 2012-2018 with a total of 779 observations. The optimistic disclosure tone is measured through DICTION 7.0 software. While, financial performance of firms is measured by return on equity, in addition, seven control variables. The paper found that firm performance has a positive association with the reported optimistic tone. This finding supports the agency and management impression theories.