← Search

Journalists and the Stock Market

Casey Dougal¹; Joseph Engelberg^2,3; Diego García; Christopher A. Parsons^2,3

¹ University of North Carolina at Chapel Hill · ² University of San Diego · ³ University of California San Diego

We use exogenous scheduling of Wall Street Journal columnists to identify a causal relation between financial reporting and stock market performance. To measure the media's unconditional effect, we add columnist fixed effects to a daily regression of excess Dow Jones Industrial Average returns. Relative to standard control variables, these fixed effects increase the R-super-2 by about 35%, indicating each columnist's average persistent "bullishness" or "bearishness." To measure the media's conditional effect, we interact columnist fixed effects with lagged returns. This increases explanatory power by yet another one-third, and identifies amplification or attenuation of prevailing sentiment as a tool used by financial journalists. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: [email protected]., Oxford University Press.

DOI

10.1093/rfs/hhr133

Volume

25 (3)

Pages

639-679

Language

en

Export

BibTeX

Sources

openalex crossref