Hype or help? Journalists’ perceptions of mispriced stocks

Heiko Jacobs

Journal of Economic Behavior & Organization, 2020, vol. 178, issue C, 550-565

Abstract: The business press is a key information intermediary in stock markets, but little is known about how journalists themselves process information. To test competing hypotheses, I combine composite mispricing scores constructed from about 200 cross-sectional anomalies with the content of about two million firm-specific newspaper articles. I find that journalists tend to write positively (negatively) about stocks likely to be undervalued (overvalued). The effect is strongest for national newspapers and overvalued stocks. These and further findings collectively lend more, though not unambiguous, support to the bright side of financial journalism. In most cases, journalists act as “watchdogs”, not as “cheerleaders”.

Keywords: Financial press; Media; Journalists; Behavioral finance; Mispricing (search for similar items in EconPapers)
JEL-codes: G12 G14 G40 G41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:178:y:2020:i:c:p:550-565

DOI: 10.1016/j.jebo.2020.07.029

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