Human Information Production in the Machine Age : Evidence from Automated Information Acquisition in the Asset Management Industry

We study how the automation of information acquisition activities in the asset management industry impacts the role humans play in such activities. We find that machine-based automation of SEC filing downloads frees up the human workforce and allows humans to research a broader set of portfolio firms. After automation, humans reallocate their information production activities towards portfolio firms for which they possess a comparative advantage over machines, including firms with more intangible assets, firms with more industry segments, and firms with which they have longer investment relationships. We also find that buy-side analysts affiliated with investment companies that adopted automated downloading tend to participate more and be more inquisitive during conference calls held by such portfolio firms. Our findings suggest that the unique value of the human workforce is amplified once machines have relieved humans from tedious and mechanical activities