Date of Award


Degree Type


Degree Name

Bachelor of Business Honours


School of Business


Faculty of Business and Law

First Advisor

Malcom Smith


The mam objective of this study is to contribute to the academic literature by investigating the relationship between narrative disclosures and corporate performance based on Australian evidence. The research design takes as its starting from the content analysis of discretionary narrative disclosures conducted by Smith and Taffler (2000), and extends their research by combining thematic content analysis and syntactic content analysis. This study focuses on the discretionary disclosures (the Chairman's Statement) of· · Australian manufacturing companies. Based on the Earnings per Share (EPS) movement between 2008 and 2009, 64 sample companies are classified into two groups: good performer and poor performer. This study is grounded on signalling theory and agency theory, and links with the impression management strategy. Based on two branches of impression management (rationalisation and enhancement), six groups of variables are collected to examine narrative disclosures from both quantity ("what to disclose") and quality ("how to disclose") perspectives. Manual coding and two computer-based software programs are employed in this study. This study finds that the word-based and theme-based variables based on discretionary disclosures are significantly correlated with corporate performance. Moreover, word-based variables can successfully classify companies between good performer and poor performer with an accuracy of 86%. However, there is no significant relationship between corporate performance and report size, use of long words (as a proxy for jargon), FLESCH readability score, or persuasive language. The main value of this study is to build a classification model based on Australian evidence for continuing companies, since most prior research focuses on UK, US and New Zealand companies and is based on a healthy/failed distinction.