Title
The Impact of Firm–Specific Characteristics on the Readability of Bank Annual Reports: Evidence from MENA Countries
Authors
Abstract
Purpose: This study examines how firm–specific characteristics—profitability, size, liquidity, age, and leverage—affect the readability of the narrative sections of annual reports of major MENA banks. While prior research focuses on developed countries, evidence from the MENA region remains limited. This study addresses this gap by integrating textual readability measures with firm–level financial data across several MENA countries, offering a novel regional perspective.
Design/methodology/approach: Panel data from 29 banks across five MENA countries (Lebanon, Qatar, Saudi Arabia, UAE, and Oman) for 2020–2023 were analyzed using multiple regression models.
Findings: Profitability and liquidity positively influence annual report readability, whereas bank age has a negative effect. Size and leverage do not significantly affect readability. These findings suggest that financially stronger and more liquid banks produce narratives that are easier to process, thereby reducing readers’ cognitive load and facilitating faster and more accurate decision-making by investors, regulators, and analysts.
Research limitations/implications: The study is limited to five countries and five characteristics. Future studies might build on these results by looking at other regions, industries, or corporate characteristics.
Practical implications: improved readability enhances information processing efficiency, supporting better investment evaluation, regulatory oversight, and risk assessment in banking decisions.
Originality/value: This research contributes to Decision Sciences by demonstrating how firm-level financial characteristics influence the cognitive accessibility of financial narratives, thereby shaping the quality and efficiency of stakeholder decision-making in emerging markets.
Keywords
Annual Report, Chairman Letter, MENA Region, Narrative, Readability
Classification-JEL
M41
Pages
157-196
How to Cite
Mahboub, R. M. (2026). The Impact of Firm–Specific Characteristics on the Readability of Bank Annual Reports: Evidence from MENA Countries. Advances in Decision Sciences, 30(2), 157-196.