Finance Webinar（2020-13)

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

Speaker: Wei Jiang, Columbia Business School, NBER, and ECGI

Time: Wednesday, 23 September, 08:00-09:30 am Beijing Time

Location: Microsoft Teams Online conference room

Abstract:

This paper analyzes how corporate disclosure has been reshaped by machine processors, employed by algorithmic traders, robot investment advisors, and quantitative analysts. Our findings indicate that increasing machine and AI readership, proxied by machine downloads, motivates firms to prepare filings that are more friendly to machine parsing and processing. Moreover, firms with high expected machine downloads manage textual sentiment and audio emotion in ways catered to machine and AI readers, such as by differentially avoiding words that are perceived as negative by computational algorithms as compared to those by human readers, and by exhibiting speech emotion favored by machine learning software processors. The publication of Loughran and McDonald (2011) is instrumental in attributing the change in the measured sentiment to machine and AI readership. While existing research has explored how investors and researchers apply machine learning and computational tools to quantify qualitative information from disclosure and news, this study is the first to identify and analyze the feedback effect on corporate disclosure decisions, i.e., how companies adjust the way they talk knowing that machines are listening.

Introduction:

Wei Jiang is Arthur F. Burns Professor of Free and Competitive Enterprise in the Finance and Economics Division. She is a Senior Fellow at the Program on Corporate Governance at Harvard Law School, a Research Associate of the NBER—Law and Economics, a member of the Committee on Capital Market Regulation, and a member of the Academic Advisory Council of the Managed Funds Association. She is currently the Vice President of the Society of Financial Studies (SFS).

Professor Jiang is a leading scholar in corporate governance and institutional investors. She has published extensively in top finance, economics, and law journals, and her research has been frequently featured in major media. She received numerous awards for research excellence, including the best paper prizes from all top-three journals Journal of Finance, Review of Financial Studies, and Journal of Financial Economics, and from asset management associations Q-Group, Inquire, CQA, and Aberdeen Standard Investments. She served as editor of Review of Financial Studies and Management Science, Associate Editor at the Journal of Finance, and board member of the American Finance Association. In recognition of her distinguished scholarship, she was named the Fellow of the Financial Management Association (FMA) in 2018.

Professor Jiang has taught courses in Corporate Finance, Corporate Governance, and Empirical Methods in the MBA, EMBA, Master, and Ph.D. programs. She is a six-time recipient of teaching excellence awards.

Professor Jiang received her B.A. and M.A. in international economics from Fudan University (China), and Ph.D. in economics from the University of Chicago in 2001.

Your participation is warmly welcomed!