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Stealing the show: The negative effects of media coverage on peers’ stock liquidity

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  • Xia, Jingjing

Abstract

Prior research documents that media coverage attracts investor attention and improves the liquidity of the featured firms. However, increased attention to the covered firms may divert attention away from uncovered firms. In the setting of Wall Street Journal's coverage of firms’ earnings announcements, I find that industry peers of the announcing firm experience a decrease in stock liquidity around the article publication day. The decrease cannot be attributed to the earnings announcement per se, and is more pronounced when the peer is less visible and less related to the announcing firm. These findings shed novel light on the negative externalities of media coverage on peer liquidity.

Suggested Citation

  • Xia, Jingjing, 2024. "Stealing the show: The negative effects of media coverage on peers’ stock liquidity," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323010632
    DOI: 10.1016/j.frl.2023.104691
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    References listed on IDEAS

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    More about this item

    Keywords

    Stock liquidity; Media coverage; Economically related firms; Limited attention;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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