Meet the Press: Survey Evidence on Financial Journalists As Information Intermediaries

Call, Andrew C.; Emett, Scott A.; Maksymov, Eldar; Sharp, Nathan Y.

doi:10.2139/ssrn.3279453

Cited by 19 publications

(35 citation statements)

References 74 publications

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“…My design choices and empirical findings are consistent with recent survey evidence in Call et al. [2018] that suggests incentives to create, as opposed to merely disseminate, information are strongest for more prominent media outlets' coverage of highly visible firms.…”

Section: Introductionsupporting

confidence: 81%

“…In summary, WSJ coverage of S&P 500 earnings is an ideal setting for testing the role of editorial content, including whether it merely disseminates and entertains, or also informs. My design choices and empirical findings are consistent with recent survey evidence in Call et al [2018] that suggests incentives to create, as opposed to merely disseminate, information are strongest for more prominent media outlets' coverage of highly visible firms.…”

Section: Introductionsupporting

confidence: 77%

“…I use absolute changes because, although journalists clearly prefer to cover extreme news, it is unclear whether they slant toward deteriorating fundamentals, improving fundamentals, or both. For example, Niessner and So [2018] show journalists slant their coverage toward firms with deteriorating operating performance, but journalists surveyed by Call et al [2018] perhaps surprisingly admit that positive news slant improves their access to management. 30 Of course, the other criteria for a good instrument is "relevance," or that the instrument (i.e., WSJ events) and endogenous variable (i.e., earnings coverage) be correlated.…”

Section: T a B L E 3 Exogeneity Testsmentioning

confidence: 99%

See 2 more Smart Citations

The Information Role of the Media in Earnings News

Guest

2021

J of Accounting Research

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I reexamine whether media articles with substantive editorial content inform the market's reaction to firms' earnings news. Using variation in earnings announcement coverage because of restructuring at The Wall Street Journal (WSJ), my analyses suggest that WSJ earnings articles improve price discovery and increase trading volume at S&P 500 earnings announcements. Additionally, textual analysis suggests media articles that differ more from the firm's earnings release increase trading volume, and that the differences speed up

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Section: Introductionsupporting

confidence: 81%

Section: Introductionsupporting

confidence: 77%

Section: T a B L E 3 Exogeneity Testsmentioning

confidence: 99%

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The Information Role of the Media in Earnings News

Guest

2021

J of Accounting Research

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“…On the one hand, the media may serve as an external monitor of managerial opportunism, which reduces corporate earnings management behavior. Survey evidence shows that financial journalists believe monitoring companies is one of their most important objectives (Call, Emett, Maksymov, & Sharp, 2018). Numerous empirical studies also find that the media monitors many aspects of firms’ corporate governance, such as financial fraud (Dyck et al., 2010; Miller, 2006), governance violation and weakness (Dyck, Volchkova, & Zingales, 2008; Joe et al., 2009), mergers and acquisitions (Liu & McConnell, 2013), and insider trading (Dai et al., 2015).…”

Section: Introductionmentioning

confidence: 99%

The monitoring role of the media: Evidence from earnings management

Chen

Cheng

et al. 2020

Business Fin & Account

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In response to the recent debate on the media, this paper examines the effect of media coverage on firm earnings management. Even if prior studies (Dyck et al., 2010;Miller, 2006) have documented the media's role in detecting and deterring accounting fraud (or extreme earnings management), it is unclear ex ante whether the media amplifies or curbs less egregious earnings management. Our results show that media coverage is negatively associated with both accrual-based and real earnings management, suggesting that the media serves as an external monitor that curbs managers' opportunistic earnings management behaviors. Further analyses show that the effect of media coverage on earnings management is more pronounced when monitoring from auditors is weak and when the other information intermediaries are active. Overall, the findings suggest a monitoring role of the media in firm financial reporting practices.

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“…4 Nevertheless, it is also possible that media co-coverage has no effect on the efficiency of information transfers between the co-covered firms, as investors may only focus on the main story of the article and overlook firms mentioned as background information, given limited attention (e.g., Hirshleifer and Teoh, 2003). In addition, as journalists often rely on third-parties' opinion as input to compensate for their lack of financial sophistication (Call et al 2020), their choice of co-coverage firms may contain little new information about the common shocks that affect the co-covered firms, or the correlation between those firms' exposure to common shocks. Thus, co-coverage may have little impact on investors' perception if their evaluation of relatedness is based solely on economic fundamentals.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Media Co-coverage on Investors’ Perceived Relatedness between Two Firms: Evidence from Information Transfers

Xia

2021

SSRN Journal

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This study examines the effects of media co-coverage-a phenomenon where multiple firms are simultaneously mentioned in the same news article-on investors' perceived relatedness between the co-covered firms. Using the setting of information transfers between two co-covered firms during earnings announcements, I find evidence consistent with co-coverage increasing the firms' perceived relatedness. Specifically, the announcement return of the co-covered peer negatively predicts the announcement return of the focal firm following the peer's earnings announcement, suggesting that focal firm investors overreact to the peer's earnings news in information transfers. The negative relationship is stronger when investors are more likely to pay attention to the news article where they were cocovered, and when the peer's earnings are more relevant to the focal firm's upcoming earnings announcement. Further analysis shows that the co-coverage-induced overreaction is stronger when the focal firm has higher uncertainty and when retail investor attention to the focal firm is higher on the peer's announcement day. These findings shed light on an unintended consequence of journalists' cocoverage practice on the efficiency with which equity investors use peer information.

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Meet the Press: Survey Evidence on Financial Journalists As Information Intermediaries

Cited by 19 publications

References 74 publications

The Information Role of the Media in Earnings News

The Information Role of the Media in Earnings News

The monitoring role of the media: Evidence from earnings management

The Effects of Media Co-coverage on Investors’ Perceived Relatedness between Two Firms: Evidence from Information Transfers

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