WSJ Category Kings - The impact of media attention on consumer and mutual fund investment decisions

• 成果类型: Article
• 署名作者: Kaniel, Ron; Parham, Robert
• 署名单位: University of Rochester; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.11.003
• 发表日期: 2017
• 页码: 337-356
• 关键词: mutual funds; investor attention; incentives; FLOWS; regression discontinuity

摘要

We exploit a novel natural experiment to establish a causal relation between media attention and consumer investment behavior, independent of the conveyed information. Our findings indicate a 31% local average increase in quarterly capital flows into mutual funds mentioned in a prominent Wall Street Journal Category Kings ranking list, compared to those funds which just missed making the list. This flow increase is about seven times larger than extra flows due to the well-documented performance-flow relation. Other funds in the same fund complex receive substantial extra flows as well, especially in smaller complexes. There is no increase in flows when the Wall Street Journal publishes similar lists absent the prominence of the Category Kings labeling. We show mutual fund managers react to the incentive created by the media effect in a strategic way predicted by theory, and present evidence for the existence of propagation mechanisms including increased fund complex advertising subsequent to having a Category King and increased efficacy of subsequent fund media mentions. (C) 2016 Elsevier B.V. All rights reserved.