On November 18, 2024, Andrea Eisfeldt of the UCLA Anderson School of Management stopped by the Lab for her talk, “The Impact of Generative AI on Firm Values.”
How do recent advances in Generative AI affect firm value? We construct the first measure of firms’ workforce exposures to Generative AI and show that an “Artificial-Minus-Human” (AMH) portfolio that is long high-exposure firms and short low-exposure firms earned daily returns of 0.44% in the two weeks following the release of ChatGPT. The labor-exposure effect is more pronounced for firms with greater data assets and is distinct from the effect of firms’ product exposures to Generative AI. Highly-exposed workforces can be either substituted for or complemented by Generative AI technologies. We measure whether the exposed tasks are core or supplemental to assess relative substitutability. Examining firms’ labor demand and profitability following the release of ChatGPT supports a labor-technology substitution channel for the increases in exposed firms’ values that we document.
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Andrea Eisfeldt is the Laurence D. and Lori W. Fink Endowed Chair in Finance at the UCLA Anderson School of Management. Her research focuses on the relationship between financial markets and the macroeconomy.
Eisfeldt’s research has been twice been awarded an Amundi Smith Breeden prize in the Journal of Finance. Her work has also been awarded the Jensen Prize in the Journal of Financial Economics, the Edwin Mills best paper award from Real Estate Economics, and grants from the National Science Foundation Grant and the Banque du France.
She recently served on the board of the American Finance Association, and currently serves on the board of the UCLA Investment Company. Eisfeldt is a research associate at the National Bureau of Economic Research in the Corporate Finance, Asset Pricing, and Economic Fluctuations and Growth working groups. Eisfeldt serves as an Associate Editor at the Journal of Political Economy and Journal of Economic Perspectives.
In addition to her 23-year career in research and teaching in finance, Professor Eisfeldt has extensive experience in asset management, including as Chief Economist at Structured Portfolio Management and consultant to AQR Capital Management. Currently, as well as serving on the board of the UCLA Investment Company, she is an academic advisor to Vise, a FinTech investment management firm. She is the owner of the Next Intangible Indices, which are based on her research on valuing intangible assets and are tracked by the Simplify NEXT Suite of ETFs.
Prior to her appointment at UCLA, Eisfeldt was a tenured Associate Professor at the Kellogg School of Management at Northwestern University. Eisfeldt earned a B.S. with highest honors from the College of Commerce at the University of Illinois at Urbana-Champaign and received her M.A. and Ph.D. in economics from the University of Chicago.
