The Monitoring Role of the Financial Press Around Corporate Announcements

Accounting and Business Research, Forthcoming

57 Pages Posted: 10 Mar 2020

See all articles by Nikolaos Tsileponis

Nikolaos Tsileponis

University of Bristol - School of Accounting and Finance

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School

Martin Walker

University of Manchester - Manchester Business School

Date Written: February 15, 2020

Abstract

This study finds that the financial press serves an important monitoring role by interpreting the tone of corporate announcements, moderating its impact to market participants in the process. Using textual analysis, we report that the press attenuates both the positive and negative tone of firm-initiated disclosures. However, the effect is asymmetric with the media mostly downplaying the tone of highly positive corporate press releases, consistent with the premise that management disclosures containing highly positive tone are less convincing. In addition, we find that the tone of the information produced by the financial media has an effect on market reactions above and beyond the impact of the linguistic content of corporate disclosures. Importantly, the impact of the linguistic content of corporate disclosures to market returns is moderated by the tone of new information included in media articles. Overall, this study adds new evidence to a growing body of literature suggesting that the tone of press-originated articles contains incremental information content.

Keywords: financial press, corporate disclosure, tone, content analysis, information intermediary, information environment

Suggested Citation

Tsileponis, Nikolaos and Stathopoulos, Konstantinos and Walker, Martin, The Monitoring Role of the Financial Press Around Corporate Announcements (February 15, 2020). Accounting and Business Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3540136

Nikolaos Tsileponis (Contact Author)

University of Bristol - School of Accounting and Finance ( email )

30-32 Tyndalls Park Road
The Priory Road Complex, Priory Road, Clifton
Bristol, BS8 1TU
United Kingdom

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School ( email )

AMBS Building
Booth Street West
Manchester, M15 6PB
United Kingdom
+44 161 275 6863 (Phone)
+44 161 275 4023 (Fax)

HOME PAGE: http://www.research.manchester.ac.uk/portal/K.Stathopoulos.html

Martin Walker

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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