Media coverage and price reactions to earnings news

Miao Yu, Hangsoo Kyung, Albert Tsang

In this study, we find that relative to firms with less media coverage, stock price sensitivity to positive (negative) earnings surprises in earnings announcements of firms with greater media coverage is stronger (weaker). This asymmetry in the effect of media coverage on stock price sensitivity to positive versus negative earnings surprises suggests that greater media coverage of earnings announcements intensifies stock price reactions to positive earnings surprises but attenuates reactions to negative earnings surprises. Moreover, we find that negative earnings news is less persistent for firms with greater media coverage. Overall, our findings support the conjecture that greater media coverage increases managers' incentive to avoid future negative news, thereby reducing the persistence of poor financial performance and weakening price reactions to negative earnings news.

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Year of publication:	2024
Authors:	Yu, Miao ; Kyung, Hangsoo ; Tsang, Albert
Published in:	China journal of accounting research : CJAR. - Guang dong sheng guang zhou shi : [Verlag nicht ermittelbar], ISSN 2214-1421, ZDB-ID 2548343-2. - Vol. 17.2024, 3, Art.-No. 100379, p. 1-24
Subject:	Asymmetric stock market reactions \| Earnings announcement \| Earnings persistence \| Media coverage \| Ankündigungseffekt \| Announcement effect \| Mediale Berichterstattung \| Börsenkurs \| Share price \| Gewinnprognose \| Gewinn \| Profit \| Aktienmarkt \| Stock market \| Kapitaleinkommen \| Capital income \| Kommunikationsmedien \| Communication media

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.1016/j.cjar.2024.100379 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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