The Media and Mispricing: The Role of the Business Press in the Pricing of Accounting Information

Drake, Michael S.; Guest, Nicholas M.; Twedt, Brady J.

doi:10.2308/accr-50757

Cited by 302 publications

(140 citation statements)

References 55 publications

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“…RavenPack covers over 36,000 companies, including all of the companies in our sample. The database identifies the first mention of any given competitive action in order to eliminate duplication (Drake, Guest, and Twedt, 2014).…”

Section: Competitive Repertoire Complexitymentioning

confidence: 99%

Competitive repertoire complexity: Governance antecedents and performance outcomes

et al. 2016

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Research summary: Past inquiry has found that implementing complex competitive repertoires (i.e., diverse and dynamic arrays of actions) is challenging, but firms benefit from doing so. Our examination of the antecedents and outcomes of complex competitive repertoires develops a more nuanced perspective. Data from 1,168 firms in 204 industries reveal that complexity initially harms performance, but then becomes a positive factor, except at high levels. We use agency and tournament theories, respectively, to examine how key governance mechanisms—ownership structure and executive compensation—help shape firms' competitive repertoires. We find that the principals of agency theory and the pay gap of tournament theory are both important antecedents of competitive complexity, and an interaction exists wherein firms build especially complex repertoires when both influences are strong. Managerial summary: In boxing, the fight does not always go to the bigger or stronger person, or even to whomever throws the most punches—the fight is sometimes won by the boxer who is unpredictable, such as throwing an uppercut when the opponent expected a right hook. Similarly, when companies compete in the marketplace, advantage is afforded not only to those with more resources or who engage in more competitive activity, but also to those whose actions are unpredictable. In this study, we develop the notion of “competitive complexity,” which describes the diversity and changing nature of a company's competitive moves. Implementing complex competitive repertoires can be painful in the short term but, if done correctly, can help company performance in the long run. Copyright © 2016 John Wiley & Sons, Ltd.

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Section: Competitive Repertoire Complexitymentioning

confidence: 99%

Competitive repertoire complexity: Governance antecedents and performance outcomes

et al. 2016

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“…The second stream of literature-which includes Sant and Zaman [1996], Bushee et al [2010], Engelberg and Parsons [2011], and Drake, Guest, and Twedt [2014]-examines the role of the media in disseminating information to a wider audience. These studies attempt to minimize or control for new information to isolate dissemination effects of the media.…”

Section: Mediamentioning

confidence: 99%

The Evolving Disclosure Landscape: How Changes in Technology, the Media, and Capital Markets Are Affecting Disclosure

Miller

Skinner

2015

J of Accounting Research

409

138

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Recent changes in technology and the media are causing significant changes in how capital markets assimilate and respond to information. We identify important themes in the disclosure literature and use this as a framework to discuss the conference papers that appear in this volume. These papers examine how managers’ disclosure practices are being affected by changes in technology, the media, and capital markets. While this work makes important progress, we discuss how continuing technological change and the emergence of new forms of media offer further opportunities for research on the role of disclosure in capital markets.

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“…Chan (2003), Tetlock (2010), and Tetlock (2011) report evidence on how public news affects stock returns and their movements within short and long windows. Drake et al (2014) document evidence that cash flow mispricing is mitigated when annual earnings announcements are more broadly disseminated by the press. Tetlock (2007) and Tetlock et al (2008) examine how investors react to the content of news media.…”

Section: Introductionmentioning

confidence: 99%

Media Coverage and the Cross‐Section of Stock Returns: The Chinese Evidence

2018

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Using hand‐collected news headlines for a large sample of listed firms in China over a period of 2000–2015, we investigate the cross‐sectional relation between media coverage and stock returns. Our results document that no‐media coverage stocks earn 55 basis points a month higher than stocks that are featured in the media. This result is robust after controlling for common risk factors and is not driven by short‐run return reversals. Further analysis provides evidence to support the investor recognition hypothesis, suggesting that mass media may play an incremental role in providing a supplement to traditional channels of information dissemination. Therefore, results in this paper are of interests to both investors and regulators on drivers of stock returns.

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The Media and Mispricing: The Role of the Business Press in the Pricing of Accounting Information

Cited by 302 publications

References 55 publications

Competitive repertoire complexity: Governance antecedents and performance outcomes

Competitive repertoire complexity: Governance antecedents and performance outcomes

The Evolving Disclosure Landscape: How Changes in Technology, the Media, and Capital Markets Are Affecting Disclosure

Media Coverage and the Cross‐Section of Stock Returns: The Chinese Evidence

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