Tone variation in financial news: A comparison of companies, journalists and financial analysts

Abstract

This article reports the findings of a comparative study of the financial news produced by companies, financial analysts, financial newspapers and news agencies about the same news events, including data before and after the financial crisis. We ground this study in second-level agenda-setting, according to which news producers select substantive and evaluative attributes for the issues they cover. Using computer-assisted text analysis, we conduct pairwise comparisons of the evaluative tone of corporate quarterly earnings press releases and the corresponding analyst reports and news stories. Our overall hypothesis is that these actors produce news about the same events with an evaluative tone that furthers their own goals as well as the goals of those actors they are dependent on, which we find partial support for. We find a positivity bias in corporate earnings press releases and analyst reports, while financial journalists eliminate the corporate positivity bias, but do not add more negativity. The results also indicate differences in the tone of financial news before and after the financial crisis. Although all actors produce news in the period after the financial crisis that is less positive and less negative than before the crisis, the balance of positive and negative tone as well as relative differences among the actors suggest that news writing by financial journalists at financial newspapers and news agencies is more negative in tone after the financial crisis, thus providing also empirical support of their independence.