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Andrea L. Eisfeldt: Generative AI and Firm Values

Event Details:

Thursday, May 30, 2024
9:00am - 10:00am PDT

Please join us for a webinar of the AI & Big Data in Finance Research Forum (ABFR):

Presenter: Andrea L. Eisfeldt (University of California, Los Angelas)

Discussant: Anastassia Fedyk (University of California, Berkeley)

Zoom webinar link: Webinar ID: 987 5927 7395  Passcode: 298977 For more information, please visit our website:

Generative AI and Firm Values

Authors: Andrea L. Eisfeldt (UCLA), Gregor Schubert (UCLA) and Ben Miao Zhang (USC)

Abstract: What are the effects of recent advances in Generative AI on the value of firms? Our study offers a quantitative answer to this question for U.S. publicly traded companies based on the exposures of their workforce to Generative AI. Our novel firm-level measure of workforce exposure to Generative AI is validated by data from earnings calls, and has intuitive relationships with firm and industry-level characteristics. Using Artificial Minus Human portfolios that are long firms with higher exposures and short firms with lower exposures, we show that higher-exposure firms earned excess returns that are 0.4% higher on a daily basis than returns of firms with lower exposures following the release of ChatGPT. Although this release was generally received by investors as good news for more exposed firms, there is wide variation across and within industries, consistent with the substantive disruptive potential of Generative AI technologies.

Bio of speaker: Andrea Eisfeldt is the Laurence D. and Lori W. Fink Endowed Chair in Finance at the UCLA Anderson School of Management. Her research focuses on the relationship between financial markets and the macroeconomy. Recent work includes studies of measures of credit risk and financial crises, fragility in over-the-counter derivatives markets, returns to mortgage-backed securities, and bank valuation. Eisfeldt?s research has been twice been awarded an Amundi Smith Breeden prize in the Journal of Finance. Her work has also been awarded the Jensen Prize in the Journal of Financial Economics, the Edwin Mills best paper award from Real Estate Economics, and grants from the National Science Foundation Grant and the Banque du France. She recently served on the board of the American Finance Association, and currently serves on the board of the UCLA Investment Company. Eisfeldt is a research associate at the National Bureau of Economic Research in the Corporate Finance, Asset Pricing, and Economic Fluctuations and Growth working groups. Eisfeldt serves as an Associate Editor at the Journal of Political Economy and Journal of Economic Perspectives. Prior to her appointment at UCLA, Eisfeldt was a tenured Associate Professor at the Kellogg School of Management at Northwestern University. Eisfeldt earned a B.S. with highest honors from the College of Commerce at the University of Illinois at Urbana-Champaign, and received her M.A. and Ph.D. in economics from the University of Chicago.

Bio of discussant: Anastassia Fedyk is an Assistant Professor of Finance and a Barbara and Gerson Bakar Faculty Fellow at the Haas School of Business at UC Berkeley. Her research lies at the intersection of behavioral finance and innovation, with a specific emphasis on using big data techniques to understand firm news and valuations. Most recently, her research has focused on economics of AI artificial intelligence (AI), studying how AI technology affects firms and workers. Her work documents that when firms invest in AI, they experience greater growth fueled by product innovation, but employment also increases, especially for highly educated technical workers. Anastassia holds a Ph.D. in Business Economics from Harvard University and a B.A. in Mathematics with honors from Princeton University. She serves as the Chief Economist at the AI for Good Foundation and is a co-founder of Economists for Ukraine.

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