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What do ads buy? Daily coverage of listed companies on the Italian press

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  • Gambaro, Marco
  • Puglisi, Riccardo

Abstract

We match daily data on newspaper coverage of a sample of Italian listed companies with monthly data on the amount of advertising that a given company has purchased on a given newspaper. Controlling for time-invariant features of each newspaper and of each company – and for ownership links between companies and newspapers – we show that newspaper coverage of a company is positively and significantly related with advertising expenditure by that company on that newspaper. The magnitude of this correlation is quite large: when controlling for ownership links, a standard deviation increase in monthly ads expenditure (i.e. 75,000 euros) is on average associated with 8 additional articles per month mentioning that company. We also find that coverage of a company is higher the day after a press release, but especially in newspapers where more ads are purchased. This result on press releases is robust to controlling for time invariant features of each company–newspaper pair, i.e. for (company×newspaper) fixed effects.

Suggested Citation

  • Gambaro, Marco & Puglisi, Riccardo, 2015. "What do ads buy? Daily coverage of listed companies on the Italian press," European Journal of Political Economy, Elsevier, vol. 39(C), pages 41-57.
    • Handle: RePEc:eee:poleco:v:39:y:2015:i:c:p:41-57
    DOI: 10.1016/j.ejpoleco.2015.03.008
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    More about this item

    Keywords

    Media bias; Advertising; Press releases; Stock returns; Italian press;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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