Have you ever noticed that during a Google search, you see a lot of similar business news about a particular topic, all seemingly covered by different news outlets?
Why are articles on New York news sites so similar to those on, say, Wisconsin news sites? Perhaps it’s because the same media companies own them, giving news outlets fewer resources. This is becoming more common across the country as we address the issue.
A new study co-authored by Flora Sun, assistant professor of accounting at Binghamton University’s School of Business, examines how business news organizations owned by the same media holding company tend to produce similar news stories, and how this can have a negative impact. We are addressing this issue by investigating the possibility of giving. For financial markets. The study found that fewer options for original news content could reduce the efficiency with which investors interpret important information in earnings reports.
“It is clear how similar reports like this affect the market, as stock prices reflect new information more slowly. Because we don’t have enough diverse opinions to try to achieve an efficient price,” Sun said. “The important point is that you may subscribe to 10 different newspapers or online news websites, but the information you are getting may be quite similar, and those sources may They all happen to be owned by a common media company.”
For the study, researchers looked at news articles about the earnings announcements of 34 major media companies representing 4,462 publicly traded companies between 2007 and 2019. A total of 288,385 articles relating to 95,820 earnings announcements were examined.
Sun and the researchers used a variety of statistical tools to analyze the data and found that individual members of a group media company often take similar approaches when portraying the same events in news coverage. I figured it out. This includes similar tone and language used in the headline and the article itself.
The study said: “Many market participants are likely unaware of this, as these media are often unrelated, and consolidation[of media companies across the country]has reduced media as information intermediaries. “Their role may be weakened.”
The researchers argued that today’s media are likely to be more motivated to share content due to economic pressures, and among other things, may produce similar content at the expense of personal quality. Researchers say content sharing tends to be more prevalent among peer broadcasters with larger viewerships, increasing the incentive to do so.
“It’s important to remember that this study doesn’t mean that the media is always biased,” Sun says. “We are simply showing how investors should perceive this scenario that exists in today’s media environment.”
The study, “Typical Media Holding Companies and the Uniqueness of Business Press Content,” was published in the American Accounting Association’s journal, “The Accounting Review.” Sun co-authored the paper with faculty researchers from Indiana University, Harvard Business School, and Texas A&M University.
