The Role of the Business Press as an Information Intermediary

Journal of Accounting Research, Vol. 48, No. 1, March 2010

Posted: 23 Nov 2011

See all articles by Brian J. Bushee

Brian J. Bushee

University of Pennsylvania - The Wharton School

John E. Core

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Wayne R. Guay

University of Pennsylvania - Accounting Department

Sophia Hamm

Tulane University - A.B. Freeman School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: November 22, 2011

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.

Keywords: Business Press, Information Asymmetry, Information Intermediaries, Earnings Announcement

JEL Classification: D82, G12, G14, M41

Suggested Citation

Bushee, Brian J. and Core, John E. and Guay, Wayne R. and Hamm, Sophia, The Role of the Business Press as an Information Intermediary (November 22, 2011). Journal of Accounting Research, Vol. 48, No. 1, March 2010 . Available at SSRN: https://ssrn.com/abstract=1963245

Brian J. Bushee

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-4872 (Phone)
215-573-2054 (Fax)

John E. Core

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02138
United States

Wayne R. Guay

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
1329 Steinberg-Dietrich Hall
Philadelphia, PA 19104-6365
United States
215-898-7775 (Phone)
215-573-2054 (Fax)

Sophia Hamm (Contact Author)

Tulane University - A.B. Freeman School of Business ( email )

7 McAlister Drive
New Orleans, LA 70118
United States

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