Accounting Seminar（2018-06）

Topic: Asymmetric Media Coverage and Stock Price Sensitivity to Positive versus Negative Earnings News

Speaker: Albert Tsang，Schulich School of Business, York University

Time: Friday, May 25th, 10:00-11:30 a.m

Place: Room 217, Guanghua Building 2

Abstract:

In this study, we examine whether and how media coverage influences stock price sensitivity to positive versus negative earnings news disclosures. We find that media sensitivity to negative earnings news is greater than media sensitivity to positive earnings news, consistent with the higher tendency of the media to cover and disseminate negative news to investors relative to positive news. We further find that stock price sensitivity to negative (positive) earnings news is lower (higher) when firms’ media coverage surrounding earnings announcements is high. This finding suggests that greater media coverage exacerbates and attenuates the reactions of stock prices to positive and negative earnings news disclosures, respectively. The asymmetric influence of media coverage on stock price to news sensitivity is especially pronounced for firms with lower information environments measured by lower institutional ownership, fewer analyst following and smaller firm size. Results from these cross-sectional tests suggest that the effect of the media is greater when they play a more dominant information intermediary role to the firm. Overall, our study suggests that the asymmetric media coverage of negative versus good news plays a positive role in disciplining managers’ bad news withholding behaviors. Thus, we identify a new channel through which media influences firms’ information environments.

Introduction:

Albert Tsang is an associate professor at the Schulich School of Business. He earned three Master’s degrees (M.Sc. MIS; M.Sc. Acct; M.B.A) and a Ph.D. degree in accounting from the University of Texas at Dallas in 2008. Albert has a strong research interest on corporate social responsibility, financial and non-financial disclosure, news media, and international accounting. During the past years, he has published a total of 14 publications in refereed journals, including 3 at the top 3 journals and 1 in the top 5 journal plus another 3 in the Financial Times45 journals. Albert pioneered the study of corporate social responsibility in accounting. He has two Accounting Review articles in this area, which are among the first batch of the papers on this topic. Albert also won 4 Hong Kong Government research grants during his first five year as a junior faculty member, totaling nearly CAD200k, representing the best grant application record in business schools in Hong Kong. In addition, he also serves as reviewer for more than 25 leading accounting journals for studies in the area of corporate social responsibility reporting and has been invited to present his research works by more than 80 schools and conferences in countries around the world. He has also received 4 best paper awards from conferences where he presented his papers. Currently, he is serving for the editorial board ofContemporary Accounting Research,Journal of International Accounting Research andInternational Journal of Accounting. Prior to joining academia, Dr. Tsang had extensive experience in accounting and finance and was working as an international accounting manager in publicly listed multinational corporations and living in multiple countries. He was nominated by the dean of Schulich School of Business for the award of York Research Chair for a period of five years since 2018.

//schulich.yorku.ca/faculty/albert-tsang/

Your participation is warmly welcomed!