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Earnings announcement promotions: A Yahoo Finance field experiment

Author

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  • Lawrence, Alastair
  • Ryans, James
  • Sun, Estelle
  • Laptev, Nikolay

Abstract

This study presents a field experiment in which media articles for a random sample of firms with earnings announcements are promoted to a one percent subset of Yahoo Finance users. Promoted firms have higher abnormal returns and some evidence of lower bid-ask spreads on the day of the earnings announcement. These results are more pronounced for less visible firms, negative earnings news, and on days with fewer promoted firms. These findings suggest that investor attention affects the pricing of earnings and that retail investors buy stocks that catch their attention, in a setting where attention is randomly assigned.

Suggested Citation

  • Lawrence, Alastair & Ryans, James & Sun, Estelle & Laptev, Nikolay, 2018. "Earnings announcement promotions: A Yahoo Finance field experiment," Journal of Accounting and Economics, Elsevier, vol. 66(2), pages 399-414.
    • Handle: RePEc:eee:jaecon:v:66:y:2018:i:2:p:399-414
    DOI: 10.1016/j.jacceco.2018.08.004
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    References listed on IDEAS

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    8. Bushee, Brian & Cedergren, Matthew & Michels, Jeremy, 2020. "Does the media help or hurt retail investors during the IPO quiet period?," Journal of Accounting and Economics, Elsevier, vol. 69(1).
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    10. deHaan, Ed & Lawrence, Alastair & Litjens, Robin, 2023. "Measurement Error in Google Ticker Search," Other publications TiSEM d256d897-0239-4e66-b2b0-f, Tilburg University, School of Economics and Management.
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    More about this item

    Keywords

    Investor attention; Earnings response; Capital markets field experiment; Event study; Retail investors; Earnings announcement premium;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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