Voice or noise? Repetitive information and stock performance

• Published in: Finance research letters 2023-03, Vol.52, p.103559, Article 103559
• Main Authors: Xiaoman, Jin, Qing, Li, Jun, Wang, Jingmei, Zhao
• Format: Article
• Language: English
• Subjects: Echo chamber; Information technology “abuse”; Repetitive information; Stock performance
• ISSN: 1544-6123; 1544-6131
• DOI: 10.1016/j.frl.2022.103559

•We find repetitive information has an inverted U-shaped relationship with stock performance.•We use the "echo chamber" effect and information technology "abuse" hypothesis to explain the inverted U-shaped relationship.•This inverted U-shaped relationship is also influenced by investor attention, media sources, and news sentiment. Media-aware stock performance has been a hot issue in asset pricing. A large number of studies have focused on the impact of news content. However, few researchers have studied the impact of news from the perspective of media dissemination. In this paper, using data from 126,784 news items of Chinese listed companies from 2013–2018, we theoretically and empirically validate the impact of repetitive information on the stock market. The results show that repetitive information has an inverted U-shaped relationship with stock performance. Among them, the "echo chamber" effect can be used to explain the left-side trend of the U-shape, and the information technology "abuse" hypothesis can explain the right side. In addition, further research finds that this inverted U-shaped relationship is influenced by investor attention, media sources, and news sentiment.