Mission statements and financial performance in Latin-American firms

Mission statements (MSs) are one of the most widespread managerial practices. However, a deeper understanding of the relationship between MS's characteristics and firms' financial performance is still necessary. The vast majority of the research on this topic has been performed on companies of the global north, rather than the global south. The present study addresses this literature gap through a qualitative and quantitative analysis of MS characteristics (i.e., keywords and readability) for Latin-American firms and their relationship to financial performance. The content analysis of the MS was conducted using Voyant Tools, the MS readability was measured through six readability indices (i.e., FI, FRE, FKGL, SMOG, CL and ARI) and the relationship between MS readability and financial performance was determined using regression analysis (i.e., OLS). The results of the content analysis suggest differences among industries and an international convergence toward isomorphism regarding key terms. The results of the quantitative analysis revealed a positive relationship between MS readability and return on assets (ROA) and return on equity (ROE). These results suggest a positive relation of the MS on a company's long-term financial performance, highlighting the importance of having a readable MS.