The Governance effect of the media’s news dissemination role: Evidence from insider trading

Lili Dai, Jerry T. Parwada, Bohui Zhang

Research output: Contribution to journalArticlepeer-review

79 Citations (Scopus)

Abstract

We investigate whether the media plays a role in corporate governance by disseminating news. Using a comprehensive data set of corporate and insider news coverage for the 2001–2012 period, we show that the media reduces insiders’ future trading profits by disseminating news on prior insiders’ trades available from regulatory filings. We find support for three economic mechanisms underlying the disciplining effect of news dissemination: the reduction of information asymmetry, concerns regarding litigation risk, and the impact on insiders’ personal wealth and reputation. Our findings provide new insights into the real effect of news dissemination.
Original languageEnglish
Pages (from-to)331-366
Number of pages36
JournalJournal of Accounting Research
Volume53
Issue number2
DOIs
Publication statusPublished - May 2015
Externally publishedYes

Keywords

  • media
  • information dissemination
  • corporate governance
  • insider trading

Fingerprint Dive into the research topics of 'The Governance effect of the media’s news dissemination role: Evidence from insider trading'. Together they form a unique fingerprint.

Cite this