Narrative Finance - The use of narrative to inform investment judgement. How stories move markets - the system behind the Boeing 737 MAX shock news.

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dc.contributor.advisorMoro, Andrea
dc.contributor.advisorBelghitar, Yacine
dc.contributor.authorHarris, Richard
dc.date.accessioned2024-04-30T14:46:14Z
dc.date.available2024-04-30T14:46:14Z
dc.date.issued2023-07
dc.descriptionBelghitar, Yacine - Associate Supervisoren_UK
dc.description.abstractNARRATIVE FINANCE: The use of narrative to inform investment judgement Narrative Finance is the term coined for research into this new sub-discipline of financial economics - for it is the “voice of the market.” The information embedded within text and speech is pervasive in determining asset prices. This contribution to financial research highlights ways to use financial narratives to inform investment judgement. Financial narrative is modelled as a disruptive force by uniquely applying General System Theory to illustrate the complex architecture of the financial system. The energy budget of a material narrative is seen to be expended in the work carried out to adjust asset prices. Investors can use the departure and recovery of prices from the dynamic equilibrium upon the receipt of news as an investment indicator; described herein as Decoupling Theory. The signal of a narrative is mapped as it travels through the non- linear financial system (and back as feedback). Narrative nomenclature is devised to describe dominant, dormant, and legacy narratives, the Narrative Cycle, Narrative Signal, Narrative Phases, and the Narrative Tree. This theory was tested against the shock news of the two Boeing 737 MAX 8 accidents, which provided two proxy narrative signals and investment outcomes from a single event cause. The empirical output includes the proof of theory for the narrative morphology and phases, the extraction of fast and frugal investment narrative indicators, the importance of feedback, and the matching of narrative frequency to market movements. These metrics can help investors make better judgements and decisions by narrowing the probabilities in nowcasting and forecasting models. Narrative Finance is an intellectual descendant of classical finance and behavioural economics and contributes an alternative method of valuing investments to the toolbox of investors, academics, and securities regulators.en_UK
dc.description.coursenamePhD in Leadership and Managementen_UK
dc.identifier.urihttps://dspace.lib.cranfield.ac.uk/handle/1826/21289
dc.language.isoen_UKen_UK
dc.publisherCranfield Universityen_UK
dc.publisher.departmentSOMen_UK
dc.rights© Cranfield University, 2023. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.en_UK
dc.subjectNarrative Financeen_UK
dc.subjectnewsen_UK
dc.subjectnarrativeen_UK
dc.subjecteventsen_UK
dc.subjectfinancial systemen_UK
dc.subjectfinancial economicsen_UK
dc.subjectnarrative signalen_UK
dc.subjectinvestment indicatorsen_UK
dc.subjectnegative system feedbacken_UK
dc.subjectpositive system feedbacken_UK
dc.subjectshock newsen_UK
dc.subjectlegacy narrativeen_UK
dc.subjectfinancial energyen_UK
dc.subjectnarrative cycleen_UK
dc.subjectnarrative phasesen_UK
dc.subjectasset priceen_UK
dc.subjectprice adjustmentsen_UK
dc.subjectnarrative decayen_UK
dc.subjectGeneral Systems Theoryen_UK
dc.subjectcase studyen_UK
dc.subjectevent studyen_UK
dc.subjectBoeing, 737 MAXen_UK
dc.subjectscenario planningen_UK
dc.subjectprobabilitiesen_UK
dc.subjectnowcastingen_UK
dc.subjectforecastingen_UK
dc.subjectstock marketen_UK
dc.subjectsentimenten_UK
dc.subjectmachine learningen_UK
dc.subjectlinguisticsen_UK
dc.subjectDecoupling Theoryen_UK
dc.titleNarrative Finance - The use of narrative to inform investment judgement. How stories move markets - the system behind the Boeing 737 MAX shock news.en_UK
dc.typeThesis or dissertationen_UK
dc.type.qualificationlevelDoctoralen_UK
dc.type.qualificationnamePhDen_UK

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