Managerial Control of Business Press Coverage

The business press plays a significant role in distributing firm news to investors. We investigate the extent to which managers can influence their firm’s level of coverage in newswires and national newspapers, compared with the effects of fixed firm characteristics and the news content itself. We consider three choices under managerial control: press release timing, press wire service, and ease of firm access. We find evidence that issuing press releases during the day instead of at night increases the probability of coverage, from 9% to 20% for newspapers and from 89% to 95% for newswires. Nonetheless, the largest determinants of coverage are factors like firm size and industry, which lie outside managerial control. We also examine how media incentives affect coverage choices. We find that newspapers are disproportionately likely to cover negative news, but newswires are not, suggesting that papers cover particular business events for reasons other than informativeness. We would also like to thank seminar participants at Northwestern University and Emory for helpful comments. We also wish to thank Sara Hess for her valuable research assistance. This research is funded by the Division of Research at the Harvard Business School and the USC Marshall School of Business. An earlier version of this paper was circulated under the title, “The Determinants of Coverage in the Business Press.”