Financial Advice for Retirement, Social Security, IRAs and Estate Planning

Financial Journalists And Their Sources

November 12, 2018

This is a large, academic study but has some interesting information. It gives an idea of the incentives for financial journalists and where they receive the information used to develop stories.

Our findings can be summarized in three important themes. First, financial journalists have stronger incentives to produce original information and analysis than to disseminate information already in the public domain, and they rely heavily on private communication with company management for information. Second, sell-side analysts play an important role in informing financial journalists, many of whom lack financial sophistication. Third, the incentives for sensationalism in the business press assumed in prior research are dominated by incentives for accurate, timely, in-depth, and informative reporting, while the quid pro quo incentives assumed in prior literature (e.g., putting a positive spin on company news to maintain access to inside sources) are substantial.

 

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