How to Talk When a Machine is Listening: Corporate Disclosure in the Age of AI
Review of Financial Studies, Forthcoming
84 Pages Posted: 14 Sep 2020 Last revised: 22 Mar 2023
Sean Cao
University of Maryland - Robert H. Smith School of Business
Wei Jiang
Emory University Goizueta Business School; ECGI; NBER
Baozhong Yang
Georgia State University - Robinson College of Business
Alan Zhang
Florida International University (FIU)
There are 2 versions of this paper
How to Talk When a Machine is Listening: Corporate Disclosure in the Age of AI
How to Talk When a Machine is Listening?: Corporate Disclosure in the Age of Ai
Date Written: January 12, 2023
Abstract
Growing AI readership (proxied for by machine downloads and ownership by AI-equipped investors) motivates firms to prepare filings friendlier to machine processing and to mitigate linguistic tones that are unfavorably perceived by algorithms. Loughran and McDonald (2011) and BERT available since 2018 serve as event studies supporting attribution of the decrease in the measured negative sentiment to increased machine readership. This relationship is stronger among firms with higher benefits to (e.g., external financing needs) or lower cost (e.g., litigation risk) of sentiment management. This is the first study exploring the feedback effect on corporate disclosure in response to technology.
Keywords: Machine Learning, AI, Corporate Disclosure, Textual Analysis, Speech Analysis, Feedback Effect
JEL Classification: D83, G14, G30
Suggested Citation: Suggested Citation
Sean S. Cao
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742-1815
United States
ECGI ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
NBER ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Baozhong Yang (Contact Author)
Georgia State University - Robinson College of Business ( email )
35 Broad Street
Atlanta, GA 30303-3083
United States
404-413-7350 (Phone)
404-413-7312 (Fax)
HOME PAGE: http://sites.google.com/view/baozhongyang/
Alan L. Zhang
Florida International University (FIU) ( email )
University Park
11200 SW 8th Street
Miami, FL 33199
United States
HOME PAGE: http://www.alanlzhang.com
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