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The Role of the Business Press as an Information IntermediaryBrian J. BusheeUniversity of Pennsylvania - The Wharton School John E. CoreMassachusetts Institute of Technology (MIT) - Sloan School of Management Wayne R. GuayUniversity of Pennsylvania - Accounting Department Sophia J. W. HammOhio State University (OSU) - Fisher College of Business October 1, 2009 Abstract: This paper investigates whether the business press serves as an information intermediary. The press potentially shapes firms’ information environments by packaging and disseminating information, as well as by creating new information through journalism activities. We find that greater press coverage reduces information asymmetry (i.e., lower spreads and greater depth) around earnings announcements, with broad dissemination of information having a bigger impact than the quantity or quality of press-generated information. These results are robust to controlling for firm-initiated disclosures, market reactions to the announcement, and other information intermediaries. Our findings suggest that the press helps reduce information problems around earnings announcements.
Note: Downloadable document is in Spanish. Number of Pages in PDF File: 26 Keywords: Business Press, Information Asymmetry, Information Intermediaries, Earnings Announcements JEL Classification: D82, G12, G14, M41 working papers seriesDate posted: February 1, 2007 ; Last revised: November 22, 2011Suggested CitationContact Information
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