Journalists and the Stock Market
University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School
University of California, San Diego (UCSD) - Rady School of Management
University of North Carolina at Chapel Hill - Finance Area
Christopher A. Parsons
University of California, San Diego (UCSD)
February 3, 2011
We find that a small set of financial columnists has a causal effect on short-term aggregate stock market prices. For some journalists ("bulls") the market reaction is consistently positive, whereas for others ("bears") it is negative. Because bulls and bears are rotated exogenously in our setting, we can make causal inferences about the media’s impact on aggregate market returns. Journalist effects are much stronger after extreme returns, suggesting that amplification or attenuation of existing sentiment is the mechanism underlying the financial media’s influence.
Number of Pages in PDF File: 37
Keywords: Media Bias, Market Efficiency, Financial Journalism
JEL Classification: H53, I38, J31, J33working papers series
Date posted: March 14, 2011
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