The Role of the Media in the Internet IPO Bubble

Bhattacharya, Utpal; Galpin, Neal; Ray, Rina; Yu, Xiaoyun

doi:10.1017/s0022109009990056

Cited by 165 publications

(36 citation statements)

References 52 publications

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“…As more investors become interested in an asset, news media expand coverage, attracting attention from more potential investors who buy the asset, driving prices further up, thereby attracting more news media attention, and so on. Consistent with Shiller's hypothesis, Bhattacharya et al (2009) show that news media devoted disproportionately more coverage to internet stocks than non-internet stocks during the dot-com-bubble period. The news stories were generally positive but, following the bubble's collapse, turned negative.…”

Section: Behavioural Modelssupporting

confidence: 71%

Asset Bubbles: an Application to Residential Real Estate

Scherbina

Schlusche

2012

Euro Fin Management

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Behavioural models offer new insights into why bubbles are ubiquitous in residential real estate markets. These markets are dominated by unsophisticated households who often develop optimistic views by extrapolating from past returns. Rational investors cannot easily trade against an overvaluation of housing assets because of high transaction costs and a binding short sale constraint. Circumventing the effect of the latter, the supply of housing frequently increases in response to rising prices. This helps to mitigate bubbles but often leads to overbuilding, which slows down the recovery after a bubble bursts. Models that incorporate the effects of perverse incentives and limits to arbitrage are especially helpful in explaining the bubble that developed in mortgage‐backed securities and helped fuel the recent real estate bubble by relaxing home buyers’ borrowing constraints. The literature is ambiguous about whether governments should intervene to burst bubbles, as a better response may lie in improving incentives of key market players.

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Section: Behavioural Modelssupporting

confidence: 71%

Asset Bubbles: an Application to Residential Real Estate

Scherbina

Schlusche

2012

Euro Fin Management

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“…Some authors have tried to achieve these objectives using human judgment. For instance, Bhattacharya, Galpin, Ray, and Yu (2009) engaged in a painstaking exercise of reading over 170 thousand news items about Internet IPOs in order to segregate them into good, bad and neutral news. While they find evidence of media hype during the Internet bubble phase, this phenomenon was able to explain only a small proportion of realized price increases on Internet stocks.…”

Section: Content Analysis and Computational Linguistics In Accountingmentioning

confidence: 99%

Stock market returns and the content of annual report narratives

Wisniewski

Yekini

2015

Accounting Forum

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JEL classification: M41 G12 G14Keywords: Content analysis Annual reports Stock market returns a b s t r a c t This paper uses the tools of computational linguistics to analyze the qualitative part of annual reports of UK listed companies. More specifically, the frequency of words associated with different language indicators is used to forecast future stock returns. We find that two of these indicators, capturing 'activity' and 'realism', predict subsequent price increases, even after controlling for a wide range of factors. Elevated values of these two linguistic variables, however, are not symptomatic of exacerbated risk. Consequently, investors are advised to peruse annual report narratives, as they contain valuable information that may not yet have been discounted in the prices.

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“…Previous studies have supported the notion that media reports (e.g., coverage and tenor) influence various aspects of corporate business, including stock performance (Bhattacharya et al 2009), CEO compensation and dismissal (Core et al 2008), corporate acquisitions (Liu and McConnell 2013), financial fraud (Miller 2006), and strategic change (Bednar et al 2013). Recently, several studies have focused on the disciplining power of the media on corporate social practices, such as corporate philanthropy (Chiu and Sharfman 2011;Gan 2006).…”

Section: Introductionmentioning

confidence: 95%

Word Power: The Impact of Negative Media Coverage on Disciplining Corporate Pollution

Wang

Viswanath

et al. 2015

J Bus Ethics

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Sequences of individual words make up media reports. And sequences of media reports constitute the power of the news media to influence corporate practices. In this paper, we focus on the micro-foundations of news reports to elaborate how an atmosphere of negative news reports following an initial exposure of corporate pollution activity can help stop such activity through their impact on corporate managers. We extend our understanding of the corporate governance effect of news media by considering two new aspects of reports-one, the proportion of words in negative reports relative to the total number of words in all reports; and two, the geographical origin of news media. We suggest that the more negative the media coverage, and the more local this coverage, the greater the impact on corporations. Our study of news media reports from more than 600 newspaper sources on disciplining pollution activities of listed Chinese firms from 2004 to 2012 provides strong support for our hypotheses. These findings have valuable implications for the handling of pollution issues in transitional economies via the power of news words.

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The Role of the Media in the Internet IPO Bubble

Cited by 165 publications

References 52 publications

Asset Bubbles: an Application to Residential Real Estate

Asset Bubbles: an Application to Residential Real Estate

Stock market returns and the content of annual report narratives

Word Power: The Impact of Negative Media Coverage on Disciplining Corporate Pollution

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