Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/100497
Authors: 
Ruenzi, Stefan
Focke, Florens
Niessen-Ruenzi, Alexandra
Year of Publication: 
2014
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Empirical Industrial Organization II E09-V2
Abstract: 
This paper investigates whether newspapers report more favorably about advertising corporate clients than about other firms. Our identification strategy based on high-dimensional fixed effects and high frequency advertising data shows that advertising leads to more positive press coverage. This advertising bias in reporting is found among local and national newspapers. Further results show that advertising bias manifests particularly in less negative reporting after bad news events such as negative earnings surprises or extremely negative stock returns. Our findings cast doubt on the independence of the press from corporate pressure and hint at important information frictions.
JEL: 
M37
M38
G10
Document Type: 
Conference Paper

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