News Dissemination and Investor Attention

News Dissemination and Investor Attention

Romain Boulland, François Degeorge, Edith Ginglinger

Series number :

Serial Number: 
416/2014

Date posted :

April 01 2014

Last revised :

April 04 2014
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Keywords

  • Method of dissemination • 
  • Language • 
  • Media coverage • 
  • Earnings announcements • 
  • Limited attention

In the spirit of Merton (1987), we find that improving the dissemination of company news increases the attention investors pay to a firm. We exploit a regulatory change, the European Union Transparency Directive, which pushed Continental European firms to use English-language wire services.

We find that the adoption of such a wire service results in less stock price drift and more trading volume after a firm?s earnings announcements, consistent with the idea that the firm?s method of news dissemination affects investors? attention. Our results are robust to self-selection and other endogeneity concerns.

Authors

Real name: 
Romain Boulland
Real name: 
Edith Ginglinger