TY - JOUR
T1 - The Monitoring Role of the Financial Press Around Corporate Announcements
AU - Tsileponis, Nikolaos
AU - Stathopoulos, Konstantinos
AU - Walker, Martin
N1 - Funding Information:
This work was supported by the Economic and Social Research Council [grant numbers ES/J012394/1, ES/R003904/1, ES/I005854/1]; and the Institute of Chartered Accountants in England and Wales [grant number 5-443]. Tsileponis is grateful for financial support by the University of Manchester. We are grateful for helpful comments and suggestions from two anonymous referees, Doris Merkl-Davies (Associate Editor), Brady Twedt (EAA discussant), Mark Billings, Antonis Chantziaras, Mark Clatworthy, Joachim Gassen, Igor Goncharov, Mostafa Harakeh, Tuan Ho, Chris Humphrey, Vicky Kiosse, Anastasia Kopita, Edward Lee, Stergios Leventis, Gilad Livne, Giovanna Michelon, Kostas Pappas, Ken Peasnell, Cathy Shakespeare, Barbara Sianesi, Andy Stark, Norman Strong, Liang (Alice) Xu, Steven Young, Cheng (Colin) Zeng, participants and discussants at the 2017 Alliance Manchester Business School Research Conference, the 2017 BAFA Annual Conference, the 40th EAA Annual Congress, and seminar participants at Lancaster University, the University of Exeter and the University of Bristol. We also thank Mahmoud El-Haj for excellent research assistance.
Publisher Copyright:
© 2020 Informa UK Limited, trading as Taylor & Francis Group.
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/9/18
Y1 - 2020/9/18
N2 - This study finds that the financial press serves an important monitoring role by interpreting the tone of corporate announcements, moderating its impact to market participants in the process. Using textual analysis, we report that the press attenuates both the positive and negative tone of firm-initiated disclosures. However, the effect is asymmetric with the media mostly downplaying the tone of highly positive corporate press releases, consistent with the premise that management disclosures containing highly positive tone are less convincing. In addition, we find that the tone of the information produced by the financial media has an effect on market reactions above and beyond the impact of the linguistic content of corporate disclosures. Importantly, the impact of the linguistic content of corporate disclosures to market returns is moderated by the tone of new information included in media articles. Overall, this study adds new evidence to a growing body of literature suggesting that the tone of pressoriginated articles contains incremental information content.
AB - This study finds that the financial press serves an important monitoring role by interpreting the tone of corporate announcements, moderating its impact to market participants in the process. Using textual analysis, we report that the press attenuates both the positive and negative tone of firm-initiated disclosures. However, the effect is asymmetric with the media mostly downplaying the tone of highly positive corporate press releases, consistent with the premise that management disclosures containing highly positive tone are less convincing. In addition, we find that the tone of the information produced by the financial media has an effect on market reactions above and beyond the impact of the linguistic content of corporate disclosures. Importantly, the impact of the linguistic content of corporate disclosures to market returns is moderated by the tone of new information included in media articles. Overall, this study adds new evidence to a growing body of literature suggesting that the tone of pressoriginated articles contains incremental information content.
KW - content analysis
KW - corporate disclosure
KW - financial press
KW - information environment
KW - information intermediary
KW - tone
U2 - 10.1080/00014788.2020.1735290
DO - 10.1080/00014788.2020.1735290
M3 - Article
SN - 0001-4788
VL - 50
SP - 539
EP - 573
JO - Accounting and Business Research
JF - Accounting and Business Research
IS - 6
ER -