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Media heterogeneity and post‐earnings announcement drift: evidence from China

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  • Ye Guo
  • Mengqi Huang

Abstract

This paper examines how the Chinese stock market acts differently towards state‐controlled and market‐oriented media coverage. Using a setting of post‐earnings announcement drift, we find that information from state‐controlled media enters the stock price in a timelier manner, while the message from market‐oriented media needs more time to get a response from investors. The effect is also influenced by whether the type of news coverage is good or bad. Our findings suggest that the capital market underreacts when good news is reported by the market‐oriented media.

Suggested Citation

  • Ye Guo & Mengqi Huang, 2019. "Media heterogeneity and post‐earnings announcement drift: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 3223-3252, December.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:5:p:3223-3252
    DOI: 10.1111/acfi.12570
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    Cited by:

    1. Josef Fink, 2020. "A Review of the Post-Earnings-Announcement Drift," Working Paper Series, Social and Economic Sciences 2020-04, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.
    2. Fink, Josef, 2021. "A review of the Post-Earnings-Announcement Drift," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).

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