How to Talk When a Machine is Listening: Corporate Disclosure in the Age of AI

58 Pages Posted: 14 Sep 2020 Last revised: 15 Jan 2021

See all articles by Sean Cao

Sean Cao

Georgia State University - J. Mack Robinson College of Business

Wei Jiang

Columbia Business School - Finance and Economics; ECGI; NBER

Baozhong Yang

Georgia State University - Robinson College of Business

Alan L. Zhang

Georgia State University - J. Mack Robinson College of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2020

Abstract

Growing AI readership, proxied by expected machine downloads, motivates firms to prepare filings that are friendlier to machine parsing and processing. Firms avoid words that are perceived as negative by computational algorithms, as compared to those deemed negative only by dictionaries meant for human readers. The publication of Loughran and McDonald (2011) serves as an instrumental event attributing the difference-in-differences in the measured sentiment to machine readership. High machine-readership firms also exhibit speech emotion assessed as embodying more positivity and excitement by audio processors. 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

Cao, Sean S. and Jiang, Wei and Yang, Baozhong and Zhang, Alan L., How to Talk When a Machine is Listening: Corporate Disclosure in the Age of AI (August 31, 2020). Available at SSRN: https://ssrn.com/abstract=3683802 or http://dx.doi.org/10.2139/ssrn.3683802

Sean S. Cao

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

Wei Jiang

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
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(212) 854-5553 (Phone)

ECGI ( email )

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NBER ( email )

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Baozhong Yang (Contact Author)

Georgia State University - Robinson College of Business ( email )

35 Broad Street
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404-413-7350 (Phone)
404-413-7312 (Fax)

HOME PAGE: https://sites.google.com/view/baozhongyang/

Alan L. Zhang

Georgia State University - J. Mack Robinson College of Business ( email )

35 Broad Street NW
Suite 1242
Atlanta, GA 30303
United States

HOME PAGE: http://alan-lzhang.github.io/

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