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Insights / Research BriefMay 17, 2024

Gaining Steam: Incumbent Lock-in and Entrant Leapfrogging

Richard Hornbeck, Shanon Hsuan-Ming Hsu, Anders Humlum, Martin Rotemberg
The adoption of new technologies can be slowed if companies become locked into alternatives that are cheaper at the outset. During the mid 1800s, small mills used waterpower because of its low fixed costs; their failure to switch to steam power slowed its adoption overall.
Topics:  Technology & Innovation
Insights / Research BriefOct 23, 2023

From Transcripts to Insights: Uncovering Corporate Risks Using Generative AI

Alex G. Kim, Maximilian Muhn, Valeri Nikolaev
ChatGPT generates measures of corporations’ exposure to risks that outperform existing measures in predicting firm-level stock market volatility and firms’ choices such as investment and innovation.
Topics:  Technology & Innovation
Insights / Research BriefAug 10, 2023

ChatGPT and Corporate Policies

Manish Jha, Jialin Qian, Michael Weber, Baozhong Yang
Investment scores generated by ChatGPT using conference call transcripts are strongly predictive of companies’ future capital expenditures for up to nine quarters, controlling for other predictors. The scores also predict intangible investment, R&D, and total investment, and are negatively correlated with future stock returns.
Topics:  Technology & Innovation
Insights / Research BriefMay 04, 2023

Bloated Disclosures: Can ChatGPT Help Investors Process Information?

Alex G. Kim, Maximilian Muhn, Valeri Nikolaev
Using GPT to summarize corporate disclosures results in summaries that are shorter and more informative than the originals. “Bloated” disclosures – or, those with more uninformative content – are associated with adverse capital market outcomes.
Topics:  Technology & Innovation
Insights / Research BriefMay 04, 2023

How Important Is Corporate Governance? Evidence from Machine Learning

Ian D. Gow, David F. Larcker, Anastasia A. Zakolyukina
Little support exists for a strong causal relation between corporate governance and firm outcomes, which are rather driven by such characteristics as profitability, liquidity, and growth, among others.
Topics:  Technology & Innovation
Insights / Podcast episodeMar 21, 2023

Social Media Algorithms: How You’re Curating a Biased News Feed

Tess Vigeland, Sendhil Mullainathan
Social media behaviors, moving at an ever faster pace, may not reflect what users really...
Topics:  Technology & Innovation
Insights / Research BriefMar 14, 2023

Machine Learning as a Tool for Hypothesis Generation

Jens Ludwig, Sendhil Mullainathan
By applying machine-learning algorithms to human behavior data, this paper offers a novel approach to hypothesis generation for scientific research; the authors apply this framework to reveal that judges rely on facial characteristics of defendants when making incarceration decisions.
Topics:  Technology & Innovation
Insights / Research BriefSep 27, 2022

The Human Perils of Scaling Smart Technologies: Evidence from Field Experiments

John List, Alec Brandon, Christopher M. Clapp, Robert D. Metcalfe, Michael Price
This novel research finds little evidence that smart thermostats have a statistically or economically significant effect on energy use, thus challenging assumptions about the effective scaling of new user-based technologies.
Topics:  Technology & Innovation