Soft Information in the Financial Press and Analyst Revisions

• 成果类型: Article
• 署名作者: Bradshaw, Mark T.; Lock, Brandon; Wang, Xue; Zhou, Dexin
• 署名单位: Boston College; City University of New York (CUNY) System; Baruch College (CUNY); University System of Ohio; Ohio State University; City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0264
• 发表日期: 2021
• 页码: 107-132
• 关键词: EARNINGS FORECASTS; media; explanation; news

摘要

Both sell-side analysts and the media are information intermediaries in capital markets. This study investigates the association between sell-side analyst research and information in firm-specific news coverage. More frequent recent news coverage is associated with stronger market reactions to analysts' research revisions, and primarily explained by soft information in news coverage. The primary result is robust to using both an instrumental variable and a quasi-natural experimental setting to generate exogenous variation in media coverage, alleviating concerns about endogeneity. In addition, using textual analysis, we document that explicit media references in analyst research reports are significantly associated with more frequent analyst revisions and stronger market reactions to revisions. Our study provides empirical evidence of analysts' assimilation of information from the financial press and their role in the efficiency of capital markets.