Harm Schütt (LMU München) visiting FAccT Center Research Seminar

On November 24, 2017, Harm Schütt (LMU München) presented his current research topic „Competition in Financial News Markets and Trading Activity” at the WHU Research Seminar in Finance & Accounting.

How does news market competition affect financial news coverage and trading activity? The author proposes that competition leads financial news outlets to target different audiences with differing financial sophistication and prior beliefs. As audience characteristics are not directly observable, he develops a probabilistic model to infer them from earnings announcement coverage and find economically significant differences. The author further proposes that heterogeneity in audiences exposed to an announcement reflects heterogeneity in interpretation of the earnings news and thus trading activity. He finds that higher dispersion in audience characteristics of announcement coverage is associated with higher trading volume and return volatility.

Harm Schütt from LMU München.