Media coverage and stock price synchronicity

摘要

This paper investigates the relation between the extent of media coverage and stock price synchronicity and whether this relation varies across different institutional infrastructures. We document three notable findings. First, media coverage is negatively associated with stock price synchronicity, suggesting that the media facilitates the incorporation of firm-specific information into stock prices. Second, a firm's information environment and corporate governance play a moderating role in the relation between media coverage and the synchronicity of stock prices. Third, the synchronicity-reducing effect of media coverage is stronger in countries with weak institutional infrastructures. Overall, our study suggests that media coverage is an important determinant of stock price synchronicity.