Textual Analysis in Finance

We begin this paper by updating recent reviews of textual analysis in finance while focusing on a few broad topics — social media and detecting fraud — and then discuss a central methodological issue of how lexicons should be constructed. We next center the discussion on readability as an attribute frequently incorporated in contemporaneous research, arguing that its usage begs the question of what we are measuring. Finally, we discuss how the literature might build on the intent of readability to measure something more appropriate and more broadly relevant — complexity.