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Media Endorsements of New Product Announcements: A New Marketing Strategy
Author(s) -
Doukas Angelos J.,
Guo Jie Michael,
Lam Herbert Y. T.,
Xiao Sarah Hong
Publication year - 2016
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/eufm.12057
Subject(s) - newspaper , product (mathematics) , value (mathematics) , advertising , business , marketing , word (group theory) , event study , economics , linguistics , mathematics , history , geometry , philosophy , context (archaeology) , archaeology , statistics
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.