Selected Publications: Corporate Reporting in the Era of Artificial Intelligence

16. Dezember 2020, von Pedro Magalhães Batista

Foto: LFT

This month's NBER Digest spotlighted a working paper on the change in the language in corporate disclosures. "Corporate Reporting in the Era of Artificial Intelligence" by Sean Cao, Wei Jiang, Baozhong Yang and Alan L. Zhang uses US Securities and Exchange Commission's electronic retrieval system data to point to a major change in the audience between 2003 and 2016.

Machine downloads have increased from 39 percent to 78 percent and this has led companies to prepare their disclosures in a more machine readable format. Beyond machine readability, companies have also reduced the sentimental tone and uncertain wordings of their disclosures in an attempt to improve favourable analysis. The authors point towards increased attention by managers on how to better address their new audience when disclosing companies' data as machines become the major audience.

You can find their Working Paper here and the NBER Digest's review here.