Does Firm's Silence Drive Media's Attention Away?

Abstract

In this study, using a comprehensive dataset on business media coverage and textual analysis of the discussions in firms’ quarterly earnings conference calls, we show that when management fails to satisfy the demand for information, ceteris paribus, their firms receive less media coverage. Poor information environment hurts the information-creation capacity of the media, while such an environment does not show a similar association with the media’s information-dissemination role. Furthermore, this association is more prominent for professional business media, compared to their non-professional counterparts such as blogs and alternative articles. Our results add nuance to the literature on media coverage bias by showing that supply-side factors, i.e. the factors affecting the suppliers of the coverage, mainly drive the coverage of firms, not the demand.

Keywords: non-answers; conference calls; media coverage; non-professional business media

JEL Classification: D82, G14, G30