The Impact Of Media Coverage On Stock Prices

While the media industry is emerging as the main source of information for the general public,more and more scholars have found that media coverage can participate in corporate governance by influencing public opinion,and many studies have shown that media coverage is inextricably linked to asset pricing.At present,there are general research results that media reports will cause stock market price fluctuations,but the mechanism of its role has not stopped.At present,some studies show that the news media not only plays the role of information transmission,but also influences the decision-making and behavior of individual investors in the market because of its unique media effect,risk compensation hypothesis,agenda setting function and so on.Therefore,the media coverage to a certain extent to shape the investor sentiment,in the media coverage of the path of impact on stock prices,investor sentiment more or less played a certain role in the intermediary effect.The existing literature usually takes the traditional newspaper report as the data source of the media report,rarely considers the influence of the rapid development of the network media report,in view of the two media in the communication mode,speed,scope and audience there are significant differences,this paper divides the media coverage into the traditional media and network media two categories to carry out research.Therefore,this paper screens the experience data of 873 listed enterprises in China's stock market from January 2015 to December 2019,constructs the media report index and the comprehensive index of investor sentiment by drawing on the previous method,and distinguishes the source of media coverage,that is,the traditional media report and the network media report,in order to study the influence of media coverage on stock prices,and further explores the intermediary mechanism of media coverage affecting stock prices.The conclusion of the study shows that:(1)Media coverage has a significant impact on the stock price of listed enterprises,and the traditional media coverage and online media coverage have different degrees of influence on stock prices.From the point of view of media attention,the media average number of reports and the average monthly closing price of listed companies significantly positive correlation,indicating that the more media coverage,the more driven to the stock price,from the media reporting tendency,the relatively positive media reporting tendency will have a positive impact on stock prices,and the lag of the first period of the most significant impact,that is,positive media coverage can significantly promote the rise in stock prices,in the media reports a month after the most powerful impact on stock prices.(2)Different types of media coverage can have varying degrees of impact on stock prices.The specific performance is that the number of reports and reporting tendencies of traditional media reports and online media coverage are positively related to stock prices,and the influence of online media coverage on stock prices is more significant in terms of quantity and emotional tendency than traditional media reports.(3)In further research on how media coverage affects stock prices,we find that investor sentiment plays a part in media reporting affecting stock prices.(4)After using the method of replacing the indicator and changing the time window to test the robustness,the main conclusions of this paper are consistent with the previous one,which explains the scientific nature of the empirical results of the previous article.Finally,this paper puts forward some targeted opinions and suggestions from the perspectives of regulators,investors and media practitioners,hoping to help the stock market to develop steadily and healthily.