Political polarization in financial news

Eitan Goldman, Nandini Gupta and Ryan Israelsen

Journal of Financial Economics, 2024, vol. 155, issue C

Abstract: Comparing coverage of the same corporate financial news by the conservative Wall Street Journal and the liberal New York Times, we find strong evidence of political polarization in their reporting on both the intensive and extensive margins of coverage. We show that this politics-induced disagreement in corporate financial news leads to an increase in abnormal trading volume for the most politically extreme firms. Our results highlight a new source of investor disagreement, arising out of polarized reporting of corporate financial news, that generates trade among investors.

Keywords: Media bias; Financial news; Finance and politics; Textual analysis; Trading volume (search for similar items in EconPapers)
JEL-codes: D72 D83 G12 G14 G41 L82 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:155:y:2024:i:c:s0304405x24000394

DOI: 10.1016/j.jfineco.2024.103816

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