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Media coverage and stock liquidity: Evidence from China

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  • Huang, Can
  • Huang, Hung-Yi
  • Ho, Kung-Cheng

Abstract

This study investigates the effect of media coverage on stock liquidity in the Chinese stock market. Media coverage has a significant positive effect on stock liquidity. Media coverage improves stock liquidity by improving the information environment and reducing adverse selection by investors. The positive impact of media coverage on stock liquidity weakens for firms in a more transparent information environment. The positive association is more evident in firms with more First News. Finally, the positive effect of media coverage on stock liquidity weakens when investor sentiment is high, when there are more professional investors in the stock market, and when company stocks are more attractive to investors. Overall, this study enriches relevant research on China's capital market and provides additional insights into the role of media in stock liquidity.

Suggested Citation

  • Huang, Can & Huang, Hung-Yi & Ho, Kung-Cheng, 2024. "Media coverage and stock liquidity: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 665-682.
    • Handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:665-682
    DOI: 10.1016/j.iref.2023.07.085
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    More about this item

    Keywords

    Media coverage; Stock liquidity; Information environment; Adverse selection; Information asymmetry;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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