A theory of financial media

Goldman, Eitan; Martel, Jordan; Schneemeier, Jan

doi:10.1016/j.jfineco.2021.06.038

Cited by 25 publications

(5 citation statements)

References 46 publications

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“…We find that the estimated coefficients for Vio in Columns (2) to (3) in Panel A are positive and significant, while coefficients for Vio in Column (1) in Panel B are larger and more significant than in Column (4). These results suggest that environmental performance affects CED readability more significantly when media attention is high, consistent with the view that media coverage inadvertently incentivizes managers to manipulate disclosure (Goldman et al, 2022).…”

Section: Further Analysissupporting

confidence: 83%

“…The data on firms' media coverage is collected by the Financial News Database of Chinese Listed Companies (CFND), 5 which is the first database in China that uses artificial intelligence algorithms to collect, organize and analyze listed companies' financial news from over 400 key media outlets. In media attention is high, consistent with the view that media coverage inadvertently incentivizes managers to manipulate disclosure (Goldman et al, 2022).…”

Section: Heterogeneity Analysissupporting

confidence: 63%

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Enhancing sustainable development through effective disclosure: Corporate environmental performance and readability

Zhou,

Jin,

et al. 2023

Corp Soc Responsibility Env

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Although previous studies have explored the effect of corporate environmental performance on the content of environmental disclosure, little research has investigated its impact on the textual characteristics of environmental disclosure, particularly readability. This study constructs three measures of corporate environmental disclosure (CED) readability and examines the effect of corporate environmental performance on it. Using panel data from Chinese listed firms in heavy pollution industries during the period from 2008 to 2019, we find a robust positive association between corporate environmental performance and CED readability. Furthermore, we find that this association is stronger in firms with worse earning performance, stricter regional environmental regulation, or more media attention. Our analyses also reveal a positive association between CED readability and stock price crash risk. Overall, our study contributes to the research on corporate environmental performance and environmental disclosure readability and has important implications for optimizing the regulations of environmental disclosure. Our study contributes to the literature on corporate environmental performance and environmental disclosure and also provides important theoretical and practical implications for improving corporate environmental disclosure regulation.

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Section: Further Analysissupporting

confidence: 83%

Section: Heterogeneity Analysissupporting

confidence: 63%

Enhancing sustainable development through effective disclosure: Corporate environmental performance and readability

Zhou,

Jin,

et al. 2023

Corp Soc Responsibility Env

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“…As such, when a release is less favorable, it is assumed to be less manipulated and potentially more useful representing critical negative events (crises, negative performance, etc.) that cannot be buried (Goldman, Martel, & Schneemeier, 2021). Thus, less favorable firm communication is deviant (unusual and odd) and, partly due to this rarity, assumed to be more legitimate and therefore more representative of a socially significant event for investors.…”

Section: Newsworthiness In the Earnings Contextmentioning

confidence: 99%

Media Coverage of Earnings Announcements: How Newsworthiness Shapes Media Volume and Tone

Oliver

Campbell²,

Graffin³

et al. 2022

Journal of Management

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Media coverage of earnings is consequential for firms. As such, firms work hard to ensure their performance beats analyst estimates to avoid negative coverage. However, the relationship between performance and coverage might not be as straightforward as firms assume because media coverage is a socially constructed process that reflects journalists’ social and cognitive biases while producing newsworthy content. With this in mind, we unpack the concept of newsworthiness and develop theory regarding how the media targets, in the earnings context, deviance that is socially significant for stakeholders or attaches a deviance frame to news of social significance. In doing so, we examine how the media’s pursuit of newsworthiness shapes the relationship between critical characteristics of earnings announcements—including the firm’s earnings performance, its press releases surrounding earnings, its prior reputation, and its prior media visibility—and media volume and tone. The results of our empirical tests are broadly consistent with our theorizing. Our theory and findings contribute to research on earnings, media coverage, and social evaluations.

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“…The main difference with political news stories is that readers of financial news are able to trade on financial information released by media. Goldman et al (2020) builds a theory of financial media, where journalists try to eliminate bias in the obfuscated announcements of firm managers. Our project abstracts from biases on media and announcements, and focuses on the editorial decision of which story should be reported based on the amount of information provided.…”

Section: Role Of Public Informationmentioning

confidence: 99%