Skip to main content
alt

Please enter a keyword and click the arrow to search the site

Or explore one of the areas below

Earnings announcement promotions: a Yahoo Finance field experiment

Subject

Accounting

Publishing details

Social Sciences Research Network

Authors / Editors

Lawrence A;Ryans J P;Sun E;Laptev N

Biographies

Alastair Lawrence

Publication Year

2017

Abstract

This study presents a natural 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. The promoted firms have similar fundamental and earnings-news characteristics as control firms, yet we find that promoted firms have higher abnormal returns on the day of the earnings announcement, and some evidence of lower bid-ask spreads. Moreover, these results are more pronounced for less visible firms. We do not find evidence of significant increases in trading volume, or of information acquisition by users subject to the promotion. 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.

Keywords

Investor attention; Media articles; Earnings responses; Capital markets field experiment; Abnormal returns; Retail investors

Series Number

2940223

Series

Social Sciences Research Network

Available on ECCH

No

View document


Select up to 4 programmes to compare

Select one more to compare
×
subscribe_image_desktop 5949B9BFE33243D782D1C7A17E3345D0

Sign up to receive our latest news and business thinking direct to your inbox

×

Sign up to receive our latest course information and business thinking

Leave your details above if you would like to receive emails containing the latest thought leadership, invitations to events and news about courses that could enhance your career. If you would prefer not to receive our emails, you can still access the case study by clicking the button below. You can opt-out of receiving our emails at any time by visiting: https://london.edu/my-profile-preferences or by unsubscribing through the link provided in our emails. View our Privacy Policy for more information on your rights.