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The Role of the Business Press as an Information Intermediary

The Role of the Business Press as an Information Intermediary ABSTRACT This paper investigates whether the business press serves as an information intermediary. The press potentially shapes firms' information environments by packaging and disseminating information, as well as by creating new information through journalism activities. We find that greater press coverage reduces information asymmetry (i.e., lower spreads and greater depth) around earnings announcements, with broad dissemination of information having a bigger impact than the quantity or quality of press‐generated information. These results are robust to controlling for firm‐initiated disclosures, market reactions to the announcement, and other information intermediaries. Our findings suggest that the press helps reduce information problems around earnings announcements. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting Research Wiley

The Role of the Business Press as an Information Intermediary

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References (24)

Publisher
Wiley
Copyright
©, University of Chicago on behalf of the Accounting Research Center, 2009
ISSN
0021-8456
eISSN
1475-679X
DOI
10.1111/j.1475-679X.2009.00357.x
Publisher site
See Article on Publisher Site

Abstract

ABSTRACT This paper investigates whether the business press serves as an information intermediary. The press potentially shapes firms' information environments by packaging and disseminating information, as well as by creating new information through journalism activities. We find that greater press coverage reduces information asymmetry (i.e., lower spreads and greater depth) around earnings announcements, with broad dissemination of information having a bigger impact than the quantity or quality of press‐generated information. These results are robust to controlling for firm‐initiated disclosures, market reactions to the announcement, and other information intermediaries. Our findings suggest that the press helps reduce information problems around earnings announcements.

Journal

Journal of Accounting ResearchWiley

Published: Mar 1, 2010

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