{"title":"Do local newspapers matter to institutional investors?","authors":"Byoung Uk Kang, Jonathan Sangwook Nam","doi":"10.1111/1911-3846.13049","DOIUrl":null,"url":null,"abstract":"<p>This study examines the informational role of local newspapers in institutional investments. Exploring local newspaper closures across US counties, we document that institutional investors significantly reduce their holdings in firms located near the closed newspapers. The post-closure decrease in institutional holdings is concentrated for non-local or non–hedge fund institutions. In contrast, institutions that are likely to possess information advantages—local institutions or hedge funds—do not decrease their holdings and may even increase them when faced with a lack of local news coverage. Further analysis reveals that local newspaper closures adversely impact institutional investors' ability to predict firms' stock returns, particularly for non-local or non–hedge fund institutions. Collectively, we provide novel evidence suggesting that local newspapers are a key channel through which institutional investors acquire geographically scattered information.</p>","PeriodicalId":10595,"journal":{"name":"Contemporary Accounting Research","volume":"42 3","pages":"1713-1743"},"PeriodicalIF":3.8000,"publicationDate":"2025-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Contemporary Accounting Research","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/1911-3846.13049","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines the informational role of local newspapers in institutional investments. Exploring local newspaper closures across US counties, we document that institutional investors significantly reduce their holdings in firms located near the closed newspapers. The post-closure decrease in institutional holdings is concentrated for non-local or non–hedge fund institutions. In contrast, institutions that are likely to possess information advantages—local institutions or hedge funds—do not decrease their holdings and may even increase them when faced with a lack of local news coverage. Further analysis reveals that local newspaper closures adversely impact institutional investors' ability to predict firms' stock returns, particularly for non-local or non–hedge fund institutions. Collectively, we provide novel evidence suggesting that local newspapers are a key channel through which institutional investors acquire geographically scattered information.
期刊介绍：
Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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