This study investigates how the launch of ChatGPT (GPT-3.5) has affected the quality of CEO letters in the annual reports of public companies in the Nordic countries. I use an LLM-based evaluation tool to quantify the quality of 1979 CEO letters published between the years 2020 and 2023.
I find that the launch of ChatGPT in 2022 is followed by a statistically significant improvement in the average readability and credibility levels of CEO letters of small companies, compared to those in the three-year period prior to the ChatGPT intervention. I also find a consistent quality gap between the CEO letters of small and large market capitalization companies, which narrows following the launch of ChatGPT.
This thesis enhances the understanding of how generative AI can improve the information intermediation process between market participants. It also contributes to the literature on textual analysis in finance and accounting and proposes a novel method of quantifying investor relations quality, enabling the analysis of larger sample sizes than before.
