Media endorsements of new product announcements : a new marketing strategy

Lam, H.Y.T.; Doukas, A.J.; Guo, M.; Xiao, S.

Abstract

This paper examines whether investors' decisions are influenced by the word content of newspaper reports of new product announcements. Using textual analysis we find that announcements of new products covered by financial newspapers with positive word content earn significant abnormal returns. These returns are 270 basis points higher than new products without positive word coverage, and such announcements bring negative impact to their rival firms' value. Our results suggest that the market reacts to the linguistic content of the new product announcement rather than to the announcement itself.

Citation

Lam, H., Doukas, A., Guo, M., & Xiao, S. (2016). Media endorsements of new product announcements : a new marketing strategy. European Financial Management, 22(3), 394-426. https://doi.org/10.1111/eufm.12057

• Journal Article Type: Article
• Acceptance Date: Oct 18, 2014
• Online Publication Date: Dec 29, 2014
• Publication Date: Jun 2, 2016
• Deposit Date: Dec 10, 2014
• Publicly Available Date: Dec 29, 2016
• Journal: European Financial Management
• Print ISSN: 1354-7798
• Electronic ISSN: 1468-036X
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 22
• Issue: 3
• Pages: 394-426
• DOI: https://doi.org/10.1111/eufm.12057
• Keywords: Product launch, Event study, Media sentiment, Textual analysis, Industry rivals.
• Public URL: https://durham-repository.worktribe.com/output/1448813