Friends at WSJ

69 Pages Posted: 4 Jun 2018 Last revised: 10 Nov 2020

See all articles by Guosong Xu

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: November 10, 2020


I study the effect of firm–journalist connections on media slant using a dataset on firm connections to Wall Street Journal (WSJ) reporters. When corporate events are covered by connected authors, the news sentiment becomes markedly more favorable, leading to higher stock returns. For identification, I instrument connected coverage using reporter turnover and find similar results. Moreover, 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 after the ownership change. Additional evidence suggests that journalist connections have a distorting effect on capital allocation.

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

JEL Classification: D03, G02, G34

Suggested Citation

Xu, Guosong, Friends at WSJ (November 10, 2020). Available at SSRN: or

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )


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