Black mouth, investor attention, and stock return

Ziyang Hong, Qingfu Liu, Yiuman Tse and Zilu Wang

International Review of Financial Analysis, 2023, vol. 90, issue C

Abstract: We investigate “black mouth” in the Chinese stock market, which is a form of manipulation based on disinformation, and examine how investors react to such “credible signals.” Credible signals simply refer to those that easily gain investor trust and influence investor behavior. Black mouth temporarily leads to abnormal investor attention and triggers an abnormal stock return. We show that different types of manipulators send different credible signals with black mouth by security analysts having a larger impact on stock returns. Media attention impacts investor attention more, while media sentiment has a greater impact on stock return. We also find that publicity supervision enhances the role of credible signals and makes investors more distrustful of information disseminated by ordinary manipulators, indicating the need for regulators to strengthen the supervision of black mouth.

Keywords: Black mouth; Disinformation; Investor attention; Stock return; Publicity supervision (search for similar items in EconPapers)
JEL-codes: D83 E31 G10 G14 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004374

DOI: 10.1016/j.irfa.2023.102921

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