CHICAGO: Greater dissemination of company news results in greater capital markets benefits, according to a new study from the University of Chicago's Booth School of Business.
The study analyzed 9.3 million articles from the post-Reg FD period, spanning from January 1, 2001 to December 2006, and found that companies that more widely spread their news reaped benefits like increased trading volume.
“The basic hypothesis is greater dissemination lowers the difficulty for investors to get information,” Eugene Soltes, the doctoral candidate who conducted the study, told PRWeek. “If you increase visibility of the firm, more people hear about it, [and] more people know about it. The outcome suggests that dissemination is... important for a firm.”
The study supports theories that keeping news from media could bring negative effects, he added.