“Show Me!” The Informativeness of Images

88 Pages Posted: 8 Nov 2021 Last revised: 6 Dec 2023

See all articles by Azi Ben-Rephael

Azi Ben-Rephael

Rutgers Business School - Rutgers University

Joshua Ronen

New York University (NYU) - Department of Accounting

Tavy Ronen

Rutgers Business School -Newark and New Brunswick, Department of Finance & Economics

Mi Zhou

Virginia Commonwealth University

Date Written: November 18, 2021

Abstract

We introduce the concept of visual informativeness in annual reports and innovate by using machine-learning algorithms to construct visual informativeness measures. We create a novel measure of content reinforcement, representing the information content investors can extract from images, complementing and reinforcing particulars contained in textual narrative. An increase in visual prevalence and in the degree to which images convey reinforcing information is associated with greater (lower) analyst forecast accuracy (dispersion) in subsequent quarters, and lower risk. Firms increase the use of visuals when facing an exogenous drop in analyst coverage. Importantly, visual informativeness facilitates information assimilation.

Keywords: Visual informativeness, annual reports, images, image information content, information dissemination, content reinforcement, analyst forecast accuracy, analyst dispersion

JEL Classification: D83, G12, G14, M41

Suggested Citation

Ben-Rephael, Azi and Ronen, Joshua and Ronen, Tavy and Zhou, Mi, “Show Me!” The Informativeness of Images (November 18, 2021). Available at SSRN: https://ssrn.com/abstract=3954219 or http://dx.doi.org/10.2139/ssrn.3954219

Azi Ben-Rephael (Contact Author)

Rutgers Business School - Rutgers University ( email )

HOME PAGE: http://https://sites.google.com/site/abenreph

Joshua Ronen

New York University (NYU) - Department of Accounting ( email )

40 West 4th Street, Suite 400
Suite 10-180
New York, NY 10012-1118
United States
212-998-4144 (Phone)
212-995-4599 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~jronen/

Tavy Ronen

Rutgers Business School -Newark and New Brunswick, Department of Finance & Economics ( email )

1 Washington Park
Newark, NJ 07102
United States
973-353-5272 (Phone)

HOME PAGE: http://https://www.business.rutgers.edu/faculty/tavy-ronen

Mi Zhou

Virginia Commonwealth University ( email )

301 West Main Street
Richmond, VA 23284
United States

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