Essays on Financial Information in Text

摘要

In the first essay, I study how analysts' performance depends on their incentives and access to information using a regulatory shock and the textual content of analyst reports. My results focus on two aspects of performance, informativeness and bias. After incentives and access to information are reduced, analyst reports become less informative but also less biased. My identification strategy uses the Global Research Settlement as a shock that affected analysts at investment banks, but not other analysts, in a difference-in-difference design. I find that analyst reports become more similar to one another after the shock, an indication of less information content. Additionally, I find that text exhibits lower overall sentiment, which is driven by an increase in negativity, and that reports contain fewer markers of bias (less weaseling). The results highlight a trade-off with informativeness when regulating bias.;In the second essay, we develop a new measure of innovation using a textual analysis of analyst reports. Our text-based measure gives a useful description of innovation by mature firms with and without patenting and R&D. For non-patenting firms, the measure identifies firms that adopt novel technologies and innovative business practices (e.g., Walmart's cross-geography logistics). For patenting firms, the text-based measure strongly correlates with valuable patents, which likely capture true innovation. The text-based measure robustly forecasts greater firm performance and growth opportunities for up to four years, and these value implications hold just as strongly for non-patenting firms.