The exponential increase in technological capabilities has enabled financial researchers to incorporate massive textual data for economic analysis. The study expands this avenue by aiming to identify the underlying dynamics of reporting by Chinese firms. The model linked behavioural and rationalist variables with organizational performance through the tone of the financial statements. The study utilizes panel data from 13 years of the Chinese Research Data Services (CNRDS) platform. The final dataset comprises data from 5184 different firms. The generalized method of moments (GMM) method is applied to test for inferential propositions using EViews. The findings indicate a significant influence of agency costs, CEO overconfidence, and statement tone on organizational performance. An increase in agency costs and CEO overconfidence is negatively associated with organizational performance, whereas an increase in positive tone is positively associated with improved organizational performance. Furthermore, the tone of financial statements is found to mediate this relationship. The study is a pioneer in expanding the paradigm of textual analysis by incorporating the tone of financial statements. Practically, the study provides significant insights to all the stakeholders, considering traditional and behavioral factors. 

Keywords: Textual Analysis, Agency Theory, Behavioral Factors, Organizational Performance, Chinese Stock Market