Market uncertainty and the importance of media coverage at earnings announcements

Samuel B. Bonsall, Jeremiah Green and Karl A. Muller

Journal of Accounting and Economics, 2020, vol. 69, issue 1

Abstract: We investigate whether increased investor demand for financial information arising from higher market uncertainty leads to greater media coverage of earnings announcements. We also investigate whether greater coverage during times of higher uncertainty further destabilizes financial markets because of greater attention-based trading or, alternatively, improves trading and pricing by lowering investor acquisition and interpretation costs. When uncertainty is higher, we find evidence of greater media coverage of earnings announcements and that the greater coverage leads to improvements in investor informedness, information asymmetry, and intraperiod price timeliness, and greater trade by both retail and institutional investors. In contrast to the media serving an expanded role in improving capital markets during more uncertain times, we fail to find that changes in firm-initiated disclosures lead to similar improvements and find that less frequent analyst forecast revisions exacerbate problems in capital markets during earnings announcements.

Keywords: Media coverage; Market uncertainty; Earnings announcements; Price efficiency (search for similar items in EconPapers)
JEL-codes: D82 D83 G12 G14 G41 M41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:69:y:2020:i:1:s016541011930059x

DOI: 10.1016/j.jacceco.2019.101264

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