News Dissemination and Investor Attention

52 Pages Posted: 28 Mar 2014 Last revised: 15 Mar 2016

See all articles by Romain Boulland

Romain Boulland

ESSEC Business School

Francois Degeorge

University of Lugano - Faculty of Economics; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Edith Ginglinger

Université Paris-Dauphine, PSL Research University

Date Written: March 9, 2016

Abstract

We examine how investor attention changes when a firm adopts a modern news dissemination technology. We find that after continental European firms begin using an English-language electronic wire service to disseminate company news, they exhibit a stronger initial reaction to earnings surprises, a lower post earnings announcement stock price drift, and an increase in abnormal trading volume near earnings announcements, compared to when they disseminated their news in non-electronic format and in a continental European language. Our results hold for a sub-sample of firms for which the decision to use a wire service was likely exogenous. The effect of wire services on investor attention is due to the format of news (electronic and English-language), not to the increased speed of news transmission.

Keywords: News dissemination; Language; Media coverage; Earnings announcements; Limited attention; High-Frequency Trading

JEL Classification: D83, G12, G14

Suggested Citation

Boulland, Romain and Degeorge, Francois and Ginglinger, Edith, News Dissemination and Investor Attention (March 9, 2016). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 416/2014; Swiss Finance Institute Research Paper No. 14-21. Available at SSRN: https://ssrn.com/abstract=2416318 or http://dx.doi.org/10.2139/ssrn.2416318

Romain Boulland

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

Francois Degeorge (Contact Author)

University of Lugano - Faculty of Economics ( email )

via Giuseppe Buffi 13
CH-6904 Lugano
Switzerland
41 58 666 4634 (Phone)
41 58 666 4647 (Fax)

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Edith Ginglinger

Université Paris-Dauphine, PSL Research University ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

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