Friends at WSJ

58 Pages Posted: 4 Jun 2018 Last revised: 8 Nov 2019

See all articles by Guosong Xu

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: November 5, 2019


I study the effect of the firm–journalist connections on media slant and stock returns, using a dataset on the firm’s connections to Wall Street Journal (WSJ) reporters. When corporate events are covered by connected reporters, the news sentiment becomes markedly more favorable, leading to better short-term market reactions and long-term price corrections. For identification, I instrument the connected coverage with the reporters’ turnover and find similar results. Furthermore, using Rupert Murdoch’s acquisition of the WSJ as an exogenous shock to journalistic independence, I show that firms connected to Murdoch receive better coverage and higher returns after the ownership change.

Keywords: News Sentiment, Mergers and Acquisitions, Financial Journalism, Social Connections

JEL Classification: D03, G02, G34

Suggested Citation

Xu, Guosong, Friends at WSJ (November 5, 2019). Available at SSRN: or

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )


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