Article | Review of Financial Studies | 2012

Journalists and the Stock Market

by Christopher Parsons, C. Dougal, J. Engelberg and D. Garcia


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 R2 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.

Keywords: Media; Financial Reporting; Financial Markets;


Parsons, Christopher, C. Dougal, J. Engelberg, and D. Garcia. "Journalists and the Stock Market." Review of Financial Studies 25, no. 3 (March 2012): 639–679.