Do journalists help investors analyze firms' earnings news?
Author(s)
Guest, Nicholas M
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Sloan School of Management.
Advisor
S.P. Kothari and Eric So.
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I examine whether the market's reaction to firms' earnings news varies with analysis (or editorial content) produced by financial journalists. A series of natural experiments at The Wall Street Journal (WSJ) suggests that WSJ articles increase trading volume and improve price discovery at S&P 500 earnings announcements. The effects are stronger when an article contains more original analysis and less content reproduced from the firm's press release. This evidence refines inferences from prior studies that find media dissemination, but not analysis, makes the market's earnings response more efficient. Instead, my paper suggests media analysis also enhances investors' trading decisions by improving their understanding of earnings news, albeit for a limited set of large firms. In other words, journalists' analysis efforts provide value to readers, which helps explain the continued production of costly earnings-related analysis amid increasing pressure from low-cost information sources.
Description
Thesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, 2018. Cataloged from PDF version of thesis. Includes bibliographical references (pages 79-84).
Date issued
2018Department
Sloan School of ManagementPublisher
Massachusetts Institute of Technology
Keywords
Sloan School of Management.