| I investigate the role of information distribution in financial markets by examining news dissemination by the business press. Greater dissemination of firm news is hypothesized to lower the cost of information acquisition and increase firm visibility. Through instrumentation, I examine the causal effects of differential news dissemination on bid-ask spreads, trading volume, and idiosyncratic volatility. I find that greater dissemination lowers bid-ask spreads, increases trading volume, and lowers idiosyncratic volatility. Ultimately, the results suggest that how information is distributed, even when public, is important. |
