In this thesis, I examine how the corporate financial information environment is shaped by the financial media. The thesis consists of three essays. In the first essay, I examine the role of voluntary company-initiated disclosures about firm financial performance as a stimulus for coverage in the financial press. I provide evidence that media coverage is affected by firm level disclosure management. Specifically, a firm's issuance of press releases attracts more media articles about the firm leading to greater abnormal returns and trading volumes. I find that there is a spike of media articles on the same day and one trading day following firms' press releases. I use a unique experiment, which differentiates between the online and print versions of the Wall Street Journal, to establish a causal relation between press releases and media coverage. My findings challenge the common assumption in the literature that media coverage is exogenous to the firm. In the second essay, I find that the financial media plays a significant role in enriching a firm's information environment by moderating the tone of corporate press releases. Using textual analysis, I show that the press moderates both the positive and negative tone of corporate press releases. However, the effect is asymmetric with the media disproportionately downplaying the tone of favourable corporate press releases, in line with the premise that management's highly positive news disclosures are less convincing. In addition, I find that there is an abnormal market response to the linguistic content of financial media articles rather than to the content of corporate press releases, suggesting that the tone of press-issued information is more value relevant to market participants compared to that of management's disclosures. Overall, this study offers robust evidence supporting the view that the financial media plays an important role as an information intermediary. In the third and last essay, I investigate the information dissemination and information creation roles of the financial media by examining whether the rebroadcasting of firm-initiated news (parroting) and the creation of original information by the media influence the stock market reaction to news disclosures differently. Using textual analysis, I calculate the tone expressed in corporate press releases and related articles in the financial media, and further distinguish between parroted (from the press release) and non-parroted (i.e., original) media tonal language. I provide evidence supporting a dual role of the press that affects price formation through both its information dissemination and information creation roles. However, my findings are consistent with press-generated information having the most significant impact on market reaction. My results also indicate that there is an asymmetric market effect, with negative original media tone being more value relevant to market participants compared to managerial and media-parroted (positive and negative) tonal language. As such, my findings have important implications for studies on the role of the financial media as an information intermediary in capital markets, and suggest that market participants perceive a difference between simple dissemination of firm-initiated information and new reporter-generated information.

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Over the last decade, the SEC has taken a number of steps to move towards a real-time reporting regime in an effort to deter strategic accumulation of news disclosures by management. However, evidence from theoretical literature suggests managers are still able to engage in strategic bunching of within-firm disclosures under a real-time reporting regime if managers have control over the timing of news-triggering events. To test whether real-time reporting deters strategic disclosures I examine managers' disclosure behavior for both regular poison pill adoptions and in-play pill adoptions because managers can time the regular poison pill adoptions but have limited ability to do so for in-play pill adoptions. My results indicate real-time reporting does not (does) deter disclosure bunching for regular poison pills (in-play pills). To the extent that disclosure bunching occurs for in-play pills under the real-time reporting regime, my findings suggest managers are more likely to time the disclosure of other news to achieve disclosure bunching. Disclosure bunching dampens the negative pricing impact of poison pill adoption disclosures and continues to do so under the real-time reporting regime.

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Prior research indicates that management forecast strategies affect investors' perceptions of management, which, in turn, influence investors' judgments about the firm. The current study hypothesizes and demonstrates that decisions about the completeness and form of management's forecast disclosure affect venture capitalists' (VCs) investment screening judgments. In an experiment, 53 experienced VCs indicate whether they would recommend conducting due diligence on a new venture. I manipulate the completeness (inclusion vs. omission of quantitative data about the components of earnings) and form (point vs. range forecast values) of management's financial forecasts in a 2 X 2 between-subjects design. When management is more (less) complete in its forecast disclosure, participants make more (less) favorable investment screening judgments. Additionally, when managers provide less complete disclosures, the use of point rather than range forecasts leads to particularly unfavorable screening judgments, whereas when managers provide more complete disclosures, the use of point rather than range forecasts leads to particularly favorable screening judgments. Taken together, these results indicate that the completeness of forecast disclosure increases the favorability of screening judgments and decisions about the form of financial forecasts can offset some of the adverse consequences of less complete disclosure. / Ph. D.