"Gap Widening"or"Ceiling Effect":The Role of Media in Site Visits
With rapidly digital technology updating,media plays an increasingly essential role in the capital market.Thus,it's imperative to clarify the role of media in information transmission gap.We use a dataset of site visiting of Shenzhen Stock Exchange firms from 2012 to 2020 to study the role of media in information dissemination.The research findings are as followed:(1)the media report shows"widening gap"effect,i.e.,the more media reports during the site visit,the more profit made by insider trading.This conclusion remains valid after the test of instrumental variables and other robust tests.(2)The"widening gap"effect is more pronounced in site visitings with a positive tone of media coverage.Insiders are more likely to take advantage of information to profit from selling trades when the media coverage is optimistic.(3)This effect is mitigated in the company with better corporate governance.It's harder for Insiders to make excess earnings using information superiority in firms with higher governance quality.We provide new insight into the role of media in information spreading.In addition,this study offers empirical evidences to improve the disclosure rule of site visiting and strengthen governance quality.
Media coverageInsider tradingSite visitGap wideningCeiling effect
万方数据
维普
