Journalists and the Stock Market

37 Pages Posted: 14 Mar 2011

See all articles by Casey Dougal

Casey Dougal

Drexel University

Joseph Engelberg

University of California, San Diego (UCSD) - Rady School of Management

Diego Garcia

University of Colorado at Boulder - Leeds School of Business; University of North Carolina (UNC) at Chapel Hill - Finance Area

Christopher A. Parsons

Foster School of Business, University of Washington

Date Written: February 3, 2011

Abstract

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.

Keywords: Media Bias, Market Efficiency, Financial Journalism

JEL Classification: H53, I38, J31, J33

Suggested Citation

Dougal, Casey and Engelberg, Joseph and Garcia, Diego and Parsons, Christopher A., Journalists and the Stock Market (February 3, 2011). Available at SSRN: https://ssrn.com/abstract=1784431 or http://dx.doi.org/10.2139/ssrn.1784431

Casey Dougal

Drexel University ( email )

101 N. 33rd St.
Philadelphia, PA 19104
United States
215.571.4595 (Phone)

Joseph Engelberg (Contact Author)

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Diego Garcia

University of Colorado at Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States

University of North Carolina (UNC) at Chapel Hill - Finance Area

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Christopher A. Parsons

Foster School of Business, University of Washington ( email )

PACCAR HALL
4273 E Stevens Way NE
Seattle, WA 98195
United States

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