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How Important Is the Financial Media in Global Markets?

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Author Info

  • John M. Griffin
  • Nicholas H. Hirschey
  • Patrick J. Kelly

Abstract

This article studies differences in the information content of 870,000 news announcements in 56 markets around the world. In most developed markets, a firm's stock price moves much more on days with public news about the firm. In contrast, in many emerging markets volatility is similar on news and non-news days. We examine several hypotheses for our findings. Cross-country differences in stock price reactions are best explained by insider trading, followed by differences in the quality of the news dissemination mechanism. Our findings are useful for quantifying the extent of insider trading and how the financial media affects international markets. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

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Bibliographic Info

Article provided by Society for Financial Studies in its journal Review of Financial Studies.

Volume (Year): 24 ()
Issue (Month): 12 ()
Pages: 3941-3992

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Handle: RePEc:oup:rfinst:v:24:y::i:12:p:3941-3992

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Cited by:
  1. Jacob Boudoukh & Ronen Feldman & Shimon Kogan & Matthew Richardson, 2013. "Which News Moves Stock Prices? A Textual Analysis," NBER Working Papers 18725, National Bureau of Economic Research, Inc.
  2. Roberto Casarin & Flaminio Squazzoni, 2012. "Financial press and stock markets in times of crisis," Working Papers 2012_04, Department of Economics, University of Venice "Ca' Foscari".
  3. Landsman, Wayne R. & Maydew, Edward L. & Thornock, Jacob R., 2012. "The information content of annual earnings announcements and mandatory adoption of IFRS," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 53(1), pages 34-54.
  4. Christopher F Baum & Marketa W. Halova & Alexander Kurov, 2013. "Does Regular Economic News from Emerging Countries Move Markets? Evidence from Chinese Macro Announcements," Boston College Working Papers in Economics, Boston College Department of Economics 834, Boston College Department of Economics, revised 28 Feb 2014.
  5. Ammann, Manuel & Frey, Roman & Verhofen, Michael, 2012. "Do Newspaper Articles Predict Aggregate Stock Returns?," Working Papers on Finance 1204, University of St. Gallen, School of Finance.

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