Media coverage and managerial investment learning from stock markets: International evidence

Employing a large sample of 26,819 firms over a 20-year period, our study investigates the correlation between media coverage and investment-to-price sensitivity through OLS regression. The findings reveal a noteworthy positive impact of media coverage on investment-to-price sensitivity, remaining robust even after controlling for various factors. Mechanism analysis demonstrates that the positive influence of media coverage on managerial investment learning operates through channels related to information asymmetry and corporate governance. We also find that retail investor attention can strengthen the positive relationship between media coverage and investment-to-price sensitivity. Moreover, our analysis of news sources and content highlights the significant role of internationally renowned sources, business channels, positive sentiment, and stock-related coverage in enhancing investment-to-price sensitivity. These insights provide valuable guidance for firms to optimize their use of media for decision-making, offer investors a means to identify opportunities through media-disseminated information, and call for policy-makers to support the healthy development of media in the capital market while addressing potential negative impacts.