How to Talk When a Machine is Listening?: Corporate Disclosure in the Age of AI
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.
- Mechanical downloads of corporate 10-K and 10-Q filings increased from 360,861 in 2003 to around 165 million in 2016. Companies...
Sean Cao & Wei Jiang & Baozhong Yang & Alan L Zhang & Tarun Ramadorai, 2023. "How to Talk When a Machine Is Listening: Corporate Disclosure in the Age of AI," The Review of Financial Studies, vol 36(9), pages 3603-3642.