| Authors |
Goldman, Martel, Schneemeier |
| Journal |
Journal of Financial Economics |
| Year |
2022 |
| Type |
Published Paper |
| Abstract |
We present a model of media coverage of corporate announcements. Firms strategically use the media to communicate corporate announcements to a group of traders who observe announcements not directly but through media reports. Journalists strategically select which announcements to report to readers. Media coverage inadvertently incentivizes firms to manipulate the underlying announcements. In equilibrium, media coverage is tilted towards less manipulated negative news. The presence of financial journalists leads to more manipulation but makes stock prices more informative on average. We provide
additional predictions regarding the media's impact on the quality of firm announcements
and stock prices. |
| Keywords |
Financial journalism, disclosure, manipulation, price quality |
| URL |
https://www.sciencedirect.com/science/article/pii/S0304405X21003081 |
| Tags |
Archival Empirical |
Manager / Firm Behavior |
Theory
|