Speaking business: A systematic literature review of linguistic structures and financial reporting behavior

Abstract

Language shapes its speakers' cognition and decision-making. Consequently, recent studies have examined the effects of linguistic structures like future time reference and gender marking on financial reporting behavior, though the evidence remains fragmented and inconclusive. This paper systematically reviews the academic literature on the effects of linguistic features on financial reporting. Our review suggests that the effects of future time reference on financial reporting quality are less clear-cut than those revealed in individual studies, which are often based on directional hypotheses. Also, while languages that grammatically associate the present with the future promote future-oriented behaviors, they may nevertheless induce greater market volatility. Furthermore, we document that gendered languages hamper female participation in corporate activities. By addressing gaps and limitations in existing studies, the paper proposes directions for future research to deepen our understanding of how linguistic structures shape financial reporting decisions.