Media as Other Information for Fundamental Valuation

Authors

Jiajia Fu, The University of Texas Rio Grande Valley
Jingran Zhao

Document Type

Article

Publication Date

12-2021

Abstract

The media is an important information intermediary. We investigate the informational role of the media by examining whether media content, measured by the sentiment of news articles, contains information about a firm’s fundamental value beyond that conveyed in earnings, book value, and analyst forecasts. We show that incorporating media content into Ohlson’s (1995) residual income model generally improves its ability to predict future residual income, explain current stock prices, and predict future stock prices. Our results are strengthened when media coverage is higher and when media sentiment is more dispersed

Comments

© The Author(s) 2021. This article is published with open access by The Hong Kong Polytechnic University.

Recommended Citation

Fu, Jiajia, and Jingran Zhao. "Media as Other Information for Fundamental Valuation." China Accounting and Finance Review 23, no. 4 (2021).

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Publication Title

China Accounting and Finance Review