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Measuring Corporate Culture Using Machine Learning
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DOI：10.1093/rfs/hhaa079.png)
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Abstract
En 中文
We create a culture dictionary using one of the latest machine learning techniques-the word embedding model-and 209,480 earnings call transcripts. We score the five corporate cultural values of innovation, integrity, quality, respect, and teamwork for 62,664 firm-year observations over the period 2001-2018. We show that an innovative culture is broader than the usual measures of corporate innovation - R&D expenses and the number of patents. Moreover, we show that corporate culture correlates with business outcomes, including operational efficiency, risk-taking, earnings management, executive compensation design, firm value, and deal making, and that the culture-performance link is more pronounced in bad times. Finally, we present suggestive evidence that corporate culture is shaped by major corporate events, such as mergers and acquisitions.
Keywords:
CONFERENCE CALLS
TEXTUAL ANALYSIS
SOCIAL-CONTROL
INFORMATION
MERGERS
PERFORMANCE
MANAGEMENT
EXECUTIVES
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