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ChatGPT and Corporate Policies

Author

Listed:
  • Manish Jha
  • Jialin Qian
  • Michael Weber
  • Baozhong Yang

Abstract

We create a firm-level ChatGPT investment score, based on conference calls, that measures managers' anticipated changes in capital expenditures. We validate the score with interpretable textual content and its strong correlation with CFO survey responses. The investment score predicts future capital expenditure for up to nine quarters, controlling for Tobin's q and other determinants, implying the investment score provides incremental information about firms' future investment opportunities. The investment score also separately forecasts future total, intangible, and R&D investments. High-investment-score firms experience significant negative future abnormal returns. We demonstrate ChatGPT's applicability to measure other policies, such as dividends and employment.

Suggested Citation

  • Manish Jha & Jialin Qian & Michael Weber & Baozhong Yang, 2024. "ChatGPT and Corporate Policies," NBER Working Papers 32161, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32161
    Note: AP CF EFG ME
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    Citations

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    Cited by:

    1. Wu, Qinqin & Zhuang, Qinqin & Liu, Yitong & Han, Longyan, 2024. "Technology shock of ChatGPT, social attention and firm value: Evidence from China," Technology in Society, Elsevier, vol. 79(C).
    2. Ke Wu & Baozhong Yang & Zhenkun Ying & Dexin Zhou, 2025. "Anonymization and Information Loss," Papers 2511.15364, arXiv.org.
    3. Li, Yi & Liu, Tong & Wang, Zhaohua, 2025. "Do ESG-conscious fund managers drive green innovation? An LLM-based textual analysis of fund manager narratives," Research in International Business and Finance, Elsevier, vol. 77(PB).
    4. Songrun He & Linying Lv & Asaf Manela & Jimmy Wu, 2025. "Instruction Tuning Chronologically Consistent Language Models," Papers 2510.11677, arXiv.org, revised Nov 2025.
    5. Yan Liu & He Wang, 2024. "Who on Earth Is Using Generative AI ?," Policy Research Working Paper Series 10870, The World Bank.
    6. Shimamura, Takuya & Tanaka, Yoshitaka & Managi, Shunsuke, 2025. "Evaluating the impact of report readability on ESG scores: A generative AI approach," International Review of Financial Analysis, Elsevier, vol. 101(C).
    7. Yikai Zhao & Jun Nagayasu & Xinyi Geng, 2024. "Measuring Climate Policy Uncertainty with LLMs: New Insights into Corporate Bond Credit Spreads," DSSR Discussion Papers 143, Graduate School of Economics and Management, Tohoku University.

    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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