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This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage to influence their stock prices during private equity placement.

We collect a corpus of news stories and transform the news into term sets based on the part of speech. Then, we refer to Cecchini et al. (2010) to classify the news terms into positive, negative, and usual categories. Next, we employ the SVM algorithm to perform the classification tasks and the term frequency method to perform the text mining task. In last, we use a multiple regression model to verify the hypotheses.

We determine that issuing firms in a private placement have substantially more positive news stories and fewer negative news stories than those in public offerings. Furthermore, we evidence that the media management effects of postequity issues are more active than those of preequity issues. Finally, our results demonstrate that the timing and content of financial media coverage among different equity issuance methods may be biased by firm management. According to previous studies, they may attempt to manipulate stock prices to increase the number of highly profitable insider stakeholders.

To our knowledge, this is the first study to investigate that if private placement will associate with more active media management than the public offerings. According to our results of the difference-in-means test, the public offerings market may control news coverage; however, this result is inconsistent with that of the regression results. The private placements market may also exercise media management in the “before announcement day” and “after announcement day” periods by increasing positive news and reducing negative news.

The use of social networking websites by companies to disclose corporate news and by investors to collect information for investment purposes is increasing rapidly. However, the role of investors’ affective reactions to corporate disclosures on social networking websites is under-researched. This paper aims to examine how the disclosure platform (disclosing news on a company’s Facebook Web page or the corporate investor relations Web page) and news valence (positive or negative) jointly influence investors’ affective reactions to corporate news and stock price change judgments.

The authors conduct an experimental study using 364 participants from Amazon’s Mechanical Turk website as a proxy for reasonably informed investors.

Results show that the disclosure platform influences investors’ affective reactions and stock price change judgments when the corporate news is negative, but not when the corporate news is positive. In addition, investors’ affective reactions mediate the influence of the disclosure platform on investors’ stock price change judgments when the corporate news is negative rather than positive.

This paper extends the theory on affective reactions to a social networking context by showing that differences in disclosure platforms and news valence influence investors’ affective reactions to corporate news. In addition, the study’s theory and findings have significant implications for researchers, company managers and public relations specialists, capital market participants, regulators and investor education organizations and users of social networking websites.

The purpose of this study explores the effects that media coverage of corporate social responsibility (CSR) news related to primary stakeholders (e.g. customers, employees and investors) and secondary stakeholders (e.g. community) have on the market value of companies, measured as the impact generated in the positive and negative abnormal returns for those companies.

Using a sample of 195 online papers published in the most important Spanish business newspaper during 2015, the authors implement an event study and a regression analysis that confirm the importance of CSR news for corporate financial goals.

The findings show that negative CSR news related to primary stakeholders such as investors and customers generate significant abnormal returns for companies that are notably larger than the abnormal returns generated by secondary stakeholders (e.g. community). Similarly, positive news related to primary stakeholders such as employees are the only positive news that affect market reactions significantly.

The study provides an empirical analysis that clarifies how media coverage of different types of CSR news affect the market value of companies. In doing so, the paper contributes to previous literature significantly because scant research exists that has compared the differential effects of CSR news focused on primary and secondary stakeholders. The findings are discussed under the premises of the managerial perspective of stakeholder theory.

Strategic Marketing Management. This case is also relevant for discussion in other courses like brand management.

Postgraduate Management students.

Just before the official launch of “no-negative” news edition by Dainik Bhaskar Corp. Ltd, there was widespread speculation that the group was risking too much by going against the set convention of the newspaper industry. The common belief in the industry was “If it bleeds, it leads” and “good news is no news”. While endeavoring to do away with this perception, the management needed answers to questions like “Would it really be an attractive proposition for the readers?”, “Was the group compromising the role and responsibilities of press in presenting the truth to the world?” and “How would it add value to the brand?” The entire debate was pivoted around the sustainability of positive marketing strategy and “Is it a good idea to go forward with No Negative?” For decades, Dainik Bhaskar was known for its strategy of capturing untapped markets or denting into monopolistic markets and become a leader. This case is an odyssey of moving away from the “me-too” to category (positive newspaper) positioning. The main objective of this case is to build the concept and rudiments of positive marketing in practical perspectives using the backdrop of the Hindi newspaper industry and its largest player breaking the myth “only negative news sell”. Besides this, the case also evolves the process of institutionalizing positive marketing in organizations.

The primary objective of teaching through this case is to make students aware and understand the emerging strategy of positive marketing and its ability to break through the present clutter in the market. It also elaborates on how companies can use this tool for differentiating themselves from others.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 8: Marketing.

Researchers have long been interested in understanding why and how corporate managers issue earnings guidance and the effect of such guidance on stakeholders’ (investors’ and managers’) behavior. Several recent studies have employed the experimental approach to address these issues. The purpose of this paper is to analyze and synthesize the literature on experimental studies of management earnings guidance. Consistent with the literature, I organize the synthesis to reflect (a) whether, why and how management issues guidance; (b) investors’ reactions to guidance; (c) the effect of guidance on management behavior. In addition, I provide institutional information (e.g., nature and timing of guidance) about guidance as well as provide several directions for future research. The synthesis reveals that the experimental studies have made a unique contribution to this literature by (i) providing evidence on process variables that underlie some empirical associations, (ii) directly measuring managers’ personal attributes and, (iii) closing the causality gap in the guidance literature.

Based on the premises of the institutional theory, in this paper, we explore the effects that the media coverage of positive and negative Corporate Social Responsibility (CSR) news have on the stock market value of companies in diverse industries.

Using a sample of 195 online articles published in the most important Spanish business newspaper, we implement an event study and a regression analysis.

The findings show that positive and negative CSR news, usually, have significant impacts on the stock market value of companies. Specifically, the market reaction is stronger under the announcement of negative news in all industries (i.e. basic, energy, finance and goods and services), although positive news also cause significant positive stock market reactions in the finance and basic industries.

Although the media plays an indispensable role in the dialogue around CSR, much of the research focused on the role of the media on the CSR-CFP link does not consider how the industry variable can affect the abnormal stock returns derived from CSR news. This research contributes to this gap in the literature by exploring the differences that exist in the stock market reactions to CSR news based on the industry in which the companies operate.

This paper aims to examine the differences in investors’ reactions toward firms’ corporate social responsibility (CSR)-related news announcements between individuals and institutions.

Analyzed by the short-term event study and ordinary least squares (OLS) methods using a unique CSR data set collected from newspapers in Japan from 2001 to 2016.

The study finds, first, the different reactions toward CSR-related news announcements among shareholders. Second, the findings indicate that individual investors are more sensitive to CSR-related positive news, whereas institutional investors are more concerned about the negative news, providing one of the reasons for mixed results in the studies on the CSR and financial performance linkage. Those findings indicate that CSR-related news affects investors’ behaviors differently based on their purpose, ability and accessible information.

This study deepens the understanding of the different investing behaviors toward CSR-related announcements by shareholder type. Second, different attitudes among investors require different investor relations (IR) approaches depending on the type. It also provides valuable implications not only for Japanese business managers or policymakers but also for those from countries with a similar stage of market maturity in the CSR context.

This paper is original in two ways. First, to the best of the author’s knowledge, this is the first paper to deepen the understanding of investors’ reactions toward CSR-related events through analysis by the main shareholder, which provides some insights into mixed results in the previous studies. Second, the original CSR data set collected from newspapers by the author allows the analysis to use a larger data set than other research, resulting in more robust conclusions.

The purpose of this research is to understand the relationship between publicity, advertising activity and corporate sales in the context of a company’s existing reputation.

The study brings together four unique industry datasets and uses discriminant analysis and multiple regression methods to examine the relationship between existing corporate reputation, publicity, advertising activity and sales levels for major multi-national companies in the technology products sector.

Positive publicity is most important in distinguishing between firms with higher and lower sales. The effects of negative publicity and advertising are dependent on a firm’s existing reputation. For companies with weaker reputations, positive publicity in tandem with business-to-consumer (B2C) advertising is most highly associated with higher company sales. Conversely, for firms with stronger existing reputations, advertising has a significantly diminished role; positive and even negative publicity are most crucial in distinguishing between companies with high and low sales. Negative publicity can be harmful to these firms though if it is not balanced by more positive publicity. Finally, the topic of news coverage is related to sales. Generally, stories that are positive reporting on business outcomes, leadership and business future and marketing practices are most important in discriminating between firms with stronger vs weaker sales.

For this set of technology product firms, publicity and advertising are relevant for sales. Firms with higher levels of sales have both more positive and negative publicity, but the volume of positive stories is much higher. Attracting negative publicity is common for firms that achieve higher sales, but it is offset by a greater number of positive stories, an aspect that public relations efforts can influence. B2C advertising spending meanwhile matters more for firms with weaker rather than stronger existing corporate reputations. It is most effective for firms with weaker existing reputations to maximize the positive signals in the marketplace as exemplified by positive publicity and B2C advertising efforts.

Little research has examined the relationship between different forms of corporate communications and sales; this study is a rare examination using publicity, advertising spending, existing reputation and sales in a durable goods and services context where there has been a particular dearth of even basic advertising studies. Beyond understanding the relative importance of publicity v. advertising, it also uniquely focuses on the individual topics of news publicity.

The purpose of this paper is to examine the effect of firm-level investor sentiment on a firm's share liquidity.

The authors use Bloomberg's firm-level, daily investor sentiment scores derived from firm-level news and Twitter content in a regression model to explain the variability in a firm's share liquidity.

The results indicate that improvements (deterioration) in investor sentiment derived solely from Twitter content lead to a decrease (increase) in the average firm's share liquidity. Results, although not as strong, are opposite for investor sentiment derived solely from news articles: improvements (deterioration) in news sentiment leads to an increase (decrease) in the average firm's share liquidity.

The proxy for share liquidity is the bid-ask spread, which may be an imperfect measure of liquidity. The Amihud illiquidity measure was used as an alternative proxy and yield similar results. The results have important implications for investors in assessing the determinants of share liquidity.

The sample period covers four years (2015–2018), which is determined by the availability of the Bloomberg sentiment data.

Investors increasing use of social media to express views on particular stocks and seek information that might be used in the investment decision-making process. The study links investor sentiment derived from social media (Twitter) to share liquidity.

By examining the relationship between a firm's sentiment and the firm's share liquidity, this paper advances the authors' understanding of the factors that drive a firm's share liquidity. To the authors' knowledge, this is the first study to link investor sentiment derived from firm-level news and Twitter content to a firm's share liquidity.

This paper aims to use the Covid-19 pandemic situation to conduct an experiment-like study that focuses on industry reactions under stress. Particularly, this study analyzes stock response to eight pandemic related news in 2020 across different industries. This study also investigates the role that the market risk, beta, plays in such stock reactions.

This study computes the cumulative abnormal returns (CAR) around COVID-19 events using adjusted daily stock returns of all stocks in the S&P 500 index between January 2, 2020 and December 31, 2020. This study also sorts all stocks by beta into quintiles and measures the CAR [0, +3] for each quintile around each event date.

This study finds that low beta portfolios exhibit greater abnormal returns (in absolute value) than high beta portfolios during down markets while high beta portfolios exhibit greater abnormal returns (in absolute values) when the market starts to recover. However, this study finds that beta does not seem to explain the abnormal returns reported in various industries during times of negative sentiment. During times of positive sentiment, both the beta effect and industry effect are present.

Extant literature almost unanimously concurs that the COVID-19 pandemic has brought about negative stock reactions to financial markets across the globe. Nevertheless, three interrelated issues have not been explored: market reactions during the subsequent recovery, industry heterogeneity and individual stocks’ risk profile. The study addresses these matters.