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Selective Disclosure: The Case of Nikkei Preview Articles

59 Pages Posted: 24 Jul 2015 Last revised: 24 Nov 2015

William N. Goetzmann

Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)

Yasushi Hamao

Center on Japanese Economy and Business; University of Southern California - Marshall School of Business - Finance and Business Economics Department

Date Written: November 7, 2015

Abstract

Nihon Keizai Shinbun (Nikkei for short) is a leading Japanese daily newspaper specializing in economy and business. It is also the largest vendor of Japanese financial and economic databases. During earnings announcement season, the Nikkei morning edition often publishes “preview” articles that are about companies’ sales and earnings. However, these pre-date the actual company announcements, and forecast more accurately the actual results than the existing forecasts, making the Nikkei forecasts value-relevant information. We identify 2,835 preview articles in the newspaper from 2000 to 2010. We examine the circumstances under which these preview articles are written and the impact they have on the market. Our findings show that stock price reacts positively to positive news but it does not react negatively to negative news. The market reacts to the information even before the preview articles are printed, suggesting some leakage of the information to market participants. The costs and benefits (or incentives) for companies, Nikkei, and investors are investigated using changes in returns and information content around the events. We find a positive correlation between previewing and positive news sentiment.

Keywords: Regulation FD, earnings announcement, Japanese stock market, Nikkei newspaper

JEL Classification: G15, G18, G23, G38

Suggested Citation

Goetzmann, William N. and Hamao, Yasushi, Selective Disclosure: The Case of Nikkei Preview Articles (November 7, 2015). Available at SSRN: https://ssrn.com/abstract=2634714 or http://dx.doi.org/10.2139/ssrn.2634714

William N. Goetzmann

Yale School of Management - International Center for Finance ( email )

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National Bureau of Economic Research (NBER)

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Yasushi Hamao (Contact Author)

Center on Japanese Economy and Business ( email )

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University of Southern California - Marshall School of Business - Finance and Business Economics Department ( email )

Marshall School of Business
Los Angeles, CA 90089
United States
310-717-0503 (Phone)

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