The Role of the Business Press as an Information Intermediary


  • We would like to thank Haruhiko Fujiwara, Amy Gu, and Jing-Jing Wang for their research assistance. We appreciate the helpful comments of Richard Leftwich (editor), an anonymous reviewer, Alexander Dyck, Gus DeFranco, Richard Frankel, Gordon Richardson, Scott Richardson, Catherine Schrand, Rodrigo Verdi, Robert Verrecchia, and seminar participants at the University of Amsterdam, University of Chicago, Erasmus School of Economics, University of Michigan, University of Minnesota, New York University, Penn State University, University of Toronto, Washington University, and the Wharton School. We are grateful for the financial support of the Wharton School.


This paper investigates whether the business press serves as an information intermediary. The press potentially shapes firms' information environments by packaging and disseminating information, as well as by creating new information through journalism activities. We find that greater press coverage reduces information asymmetry (i.e., lower spreads and greater depth) around earnings announcements, with broad dissemination of information having a bigger impact than the quantity or quality of press-generated information. These results are robust to controlling for firm-initiated disclosures, market reactions to the announcement, and other information intermediaries. Our findings suggest that the press helps reduce information problems around earnings announcements.