Headlines and Bottom Lines: Attention and Learning Effects from Media Coverage of Mutual Funds

49 Pages Posted: 20 Mar 2005

See all articles by Ron Kaniel

Ron Kaniel

University of Rochester - Simon Business School; CEPR

Laura T. Starks

University of Texas at Austin - Department of Finance

Vasudha Vasudevan

University of Texas at Austin - Department of Finance

Date Written: Februaty 2007

Abstract

To study attention and learning effects in financial markets, we investigate the role of media coverage in investment decisions of mutual fund investors and the consequent effects on fund flows. Employing a database of nearly 10,000 news articles and controlling for endogeneity in media coverage, we find that fund characteristics affect the probability of a news story and that the existence and stance of media coverage affects net investor flows into the fund in ways consistent with investor attention and learning.

Keywords: mutual funds, attention, learning, fund flows, media

JEL Classification: G20

Suggested Citation

Kaniel, Ron and Starks, Laura T. and Vasudevan, Vasudha, Headlines and Bottom Lines: Attention and Learning Effects from Media Coverage of Mutual Funds (Februaty 2007). Available at SSRN: https://ssrn.com/abstract=687103 or http://dx.doi.org/10.2139/ssrn.687103

Ron Kaniel (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

HOME PAGE: http://rkaniel.simon.rochester.edu

CEPR ( email )

London
United Kingdom

Laura T. Starks

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)

Vasudha Vasudevan

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

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