How can similar news stories influence financial markets? Here’s what investors need to know – Binghamton News

Researchers reviewed news articles about earnings announcements in 34 major media outlets involving 4,462 publicly traded companies between 2007 and 2019 for the study. In all, 288,385 articles about 95,820 earnings announcements were examined.

Using various statistical tools to analyze the data, Sun and fellow researchers determined that individual members of group media companies often take similar approaches when portraying the same event in their news coverage. This includes similar tones and language used in headlines and the articles themselves.

“Many market participants are likely unaware of this, as these media outlets often appear unrelated,” the study noted, “and consolidation (of media companies nationwide) may weaken the media’s role as an information intermediary.”

The researchers contended media outlets today likely have higher incentives to share content due to economic pressures, which, among other things, could lead to producing similar content at the expense of individual quality. Shared content tends to be more prevalent among outlets with peers with high audience reach, increasing the incentive to do so, researchers said.

“It’s important to remember that this research isn’t saying the media is always biased,” Sun said. “We’re just demonstrating how investors should be aware of this scenario that exists in today’s media landscape.”

The study, “Common Media Holding Companies and the Uniqueness of Business Press Content,” was published in The Accounting Review, an American Accounting Association journal. Sun co-authored the paper along with faculty researchers from Indiana University, Harvard Business School and Texas A&M University.