Digital Transformation Payday

CHAPTER 15Predictor Communications: It Is About What You Sing and How You Sing to Influence Your Payday

This book and the underlying research emphasize analyzing what companies say about their digital transformation as the best yet available proxy for their true digital transformation status. For this we have heavily built on our proxy variable DIGITALPROXY, which measures what companies say about their digital transformation by counting what we have called replicable references in the annual reports. More information on how companies say what they say about their digital transformation (how they sing their digital transformation song) has so far only been in the form of sentiment controls for POLARITY and SUBJECTIVITY. They both showed positive and significant correlations to logMARKETCAP and logROA3Y.

But with all the analytical opportunities our nonparametric model offers, there are additional interesting questions we can ask:

• Which sentiment elasticities can be implied from the analysis on financial parameters based on our historical dataset?
• Can we go even further in somehow understanding the level of concreteness of what is being said, that is, what we call quantification‐level elasticities?

For the sentiment elasticity case, we just rerun the same analysis (see Appendix F) as for our financials for POLARITY and SUBJECTIVITY.

For the quantification‐level elasticity case, things are a little more complex. A more sophisticated dependency analysis was conducted for all ...