Investor relations represents a firm's commitment to communicate effectively with the external community which includes investors and analysts and both mandatory and voluntary information release is expected to reduce information asymmetry. We investigate the effects of disclosure quality on...

We use unsupervised machine learning techniques of natural language processing to measure the semantic relatedness of firms’ narrative risk disclosures (NRD) in the “risk factor” section of their annual reports. We find strong return predictability among firms with overlapping NRD. This...