The impact of generative AI on information processing: Evidence from the ban of ChatGPT in Italy

Jeremy Bertomeu, Yupeng Lin, Yibin Liu and Zhenghui Ni

Journal of Accounting and Economics, 2025, vol. 80, issue 1

Abstract: This paper explores how the emergence of generative artificial intelligence is reshaping the information environment in capital markets. Leveraging an unexpected ban on ChatGPT in Italy, we examine its impact on the information processing capabilities of market participants. We employ metrics for AI-generated text detection to show that the ban coincides with decreased AI usage by domestic financial analysts and fewer earnings forecasts issued relative to foreign analysts covering the same firm. The negative effects are more pronounced among analysts whose pre-ban reports are more consistent with AI use or analysts with a technical background. The ban also diminishes forecast accuracy, increases reliance on industry-specific information, and reduces information efficiency. Furthermore, investor reactions to earnings announcements become more pronounced, and bid–ask spreads widen, reflecting lower market efficiency.

Keywords: Generative AI; ChatGPT; Analyst; Information processing; Market efficiency (search for similar items in EconPapers)
JEL-codes: E44 E65 G10 G14 O00 O33 O38 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165410125000187
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:80:y:2025:i:1:s0165410125000187

DOI: 10.1016/j.jacceco.2025.101782

Access Statistics for this article

Journal of Accounting and Economics is currently edited by J. L. Zimmerman, S. P. Kothari, T. Z. Lys and R. L. Watts

More articles in Journal of Accounting and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().