Tax News: Evidence from Google Searches and News Coverage

Svatopluk Kapounek and Jolana Stejskalová

Czech Journal of Economics and Finance (Finance a uver), 2023, vol. 73, issue 4, 330-350

Abstract: We investigate the links between stock returns, market risks, profitability, and behavioral attention on specific fiscal acts in the context of US stock markets. Behavioral attention refers to actions highlighting the importance of information, such as information-selection behavior. Using Google search activity, we focus on the impact of selected tax news on 4,157 US stocks for 2004–2017. We find that positive news is perceived by investors more strongly than negative news, and this also applies to news coverage. We also find evidence that tax news has a different effect on dividend-paying companies than on non-dividend-paying companies.

Keywords: Behavioural attention; Google trends; tax news (search for similar items in EconPapers)
JEL-codes: G4 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:73:y:2023:i:4:p:330-350

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