Can institutional investors influence media sentiment?

IF 1.8 Q2 BUSINESS, FINANCE

International Journal of Managerial Finance Pub Date : 2024-04-19 DOI:10.1108/ijmf-08-2023-0389

Heng (Emily) Wang, Xiaoyang Zhu

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引用次数: 0

Abstract

Purpose

The dissemination of misleading and false information through media can jeopardize a company’s reputation, thus posing a threat to its stock and performance. Institutional investors are known to influence capital markets. Therefore, this paper investigates whether institutional investors engage in shaping the media sentiment stock nexus, stabilize company stocks and enhance performance.

Design/methodology/approach

We first investigate the effect of media sentiment on market reactions by using panel regression models. To examine the role of institutional investors, we design a quasi-experiment by exploiting the Financial Crisis of 2008 and go further by examining the heterogeneity across levels of institutional ownership. Due to risk-averse, investors may respond asymmetrically to pessimistic and positive sentiment. Accordingly, we split the sample into two sub-types, good news and bad news, based on keywords representing positive or negative content.

Findings

We find supportive evidence that institutional investors have impacts on how the markets react to media news, and the impacts are heterogeneous in the face of bad and good news. We conjecture that institutional investors act as a stabilizer of stock prices through media sentiment management.

Originality/value

This paper confirms the distinctive effects of institutional investors on capital markets, and uncovers the behind-the-scenes intervention and possible causal link running from institutional investors to media sentiment management. It contributes to the broad field of institutional investors' behavior, media news involvement in capital markets and market efficiency.

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机构投资者能否影响媒体情绪？

目的通过媒体传播误导性和虚假信息会损害公司的声誉，从而对其股票和业绩构成威胁。众所周知，机构投资者会影响资本市场。因此，本文研究了机构投资者是否参与塑造媒体情绪股票关系，稳定公司股票并提高业绩。设计/方法/途径我们首先使用面板回归模型研究媒体情绪对市场反应的影响。为了研究机构投资者的作用，我们利用 2008 年的金融危机设计了一个准实验，并进一步研究了不同机构持股水平的异质性。由于规避风险，投资者可能会对悲观情绪和积极情绪做出不对称的反应。因此，我们根据代表正面或负面内容的关键词，将样本分为两个子类型，即好消息和坏消息。研究结果我们发现支持性证据表明，机构投资者会影响市场对媒体新闻的反应，而且在面对坏消息和好消息时，影响是异质的。原创性/价值本文证实了机构投资者对资本市场的独特影响，揭示了从机构投资者到媒体情绪管理的幕后干预和可能的因果联系。它对机构投资者行为、媒体新闻参与资本市场和市场效率等广泛领域有所贡献。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Managerial Finance BUSINESS, FINANCE-

CiteScore

4.10

自引率

0.00%

发文量

期刊介绍： Treasury and Financial Risk Management ■Redefining, measuring and identifying new methods to manage risk for financing decisions ■The role, costs and benefits of insurance and hedging financing decisions ■The role of rating agencies in managerial decisions Investment and Financing Decision Making ■The uses and applications of forecasting to examine financing decisions measurement and comparisons of various financing options ■The public versus private financing decision ■The decision of where to be publicly traded - including comparisons of market structures and exchanges ■Short term versus long term portfolio management - choice of securities (debt vs equity, convertible vs non-convertible)