Earnings announcement promotions: A Yahoo Finance field experiment

Alastair Lawrence, James Ryans, Estelle Sun and Nikolay Laptev

Journal of Accounting and Economics, 2018, vol. 66, issue 2, 399-414

Abstract: This study presents a field experiment in which media articles for a random sample of firms with earnings announcements are promoted to a one percent subset of Yahoo Finance users. Promoted firms have higher abnormal returns and some evidence of lower bid-ask spreads on the day of the earnings announcement. These results are more pronounced for less visible firms, negative earnings news, and on days with fewer promoted firms. These findings suggest that investor attention affects the pricing of earnings and that retail investors buy stocks that catch their attention, in a setting where attention is randomly assigned.

Keywords: Investor attention; Earnings response; Capital markets field experiment; Event study; Retail investors; Earnings announcement premium (search for similar items in EconPapers)
JEL-codes: G12 G14 M41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:66:y:2018:i:2:p:399-414

DOI: 10.1016/j.jacceco.2018.08.004

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