Media sentiment and price run-ups

Abstract

We empirically test competing hypotheses about the role of financial media sentiment in price run-ups. Our global analysis of unusual price increases in stock market segments provides no evidence of media slant. This assessment is further supported, among others, by the analysis of thematically focused articles, by the study of price discovery during media strikes as well as by the analysis of media sentiment in the context of twin stocks. Overall, our findings are consistent with the informative nature of the financial media.

Keywords: Media, business press, textual analysis, stock markets, bubbles

JEL Classification: G12, G14, G40, G41