26-08-2017, 12:14 PM
Stock prices reflect information about companies' business environments, their operations and, in general, their fundamentals. Recently, several studies have analyzed the link between news coverage and stock prices, but there is no evidence of how channels and forms of information communication affect investor behavior. We analyze these aspects by focusing on a large sample of corporate governance news published between 2003 and 2007 in "Il Sole 24 Ore", Italy's leading financial newspaper. We demonstrate that before the news is made public, investors can only evaluate the type of corporate governance event that underlies it. After publication, investors are influenced by the content (positive or negative) and the tone of communication (strong or weak) of the news.