Is Investor Attention for Sale? The Role of Advertising in Financial Markets

Joshua Madsen, Marina Niessner

Research output: Contribution to journalArticlepeer-review

46 Scopus citations


Prior research documents capital market benefits of increased investor attention to accounting disclosures and media coverage; however, little is known about how investors and markets respond to attention-grabbing events that reveal little nonpublic information. We use daily firm advertising data to test how advertisements, which are designed to attract consumers' attention, influence investors' attention and financial markets (i.e., spillover effects). Exploiting the fact that firms often advertise at weekly intervals, we use an instrumental variables approach to provide evidence that print ads, especially in business publications, trigger temporary spikes in investor attention. We further find that trading volume and quoted dollar depths increase on days with ads in a business publication. We contribute to research on how management choices influence firms' information environments, determinants and consequences of investor attention, and consequences of advertising for financial markets.

Original languageEnglish (US)
Pages (from-to)763-795
Number of pages33
JournalJournal of Accounting Research
Issue number3
StatePublished - Jun 2019

Bibliographical note

Funding Information:
Accepted by Haresh Sapra. We are grateful to Julie Goodrich at MediaRadar for assistance acquiring the data used in this paper. We also thank an anonymous referee, Phil Berger, Beth Blankespoor (discussant), Michael Chin, James Choi, Ted Christensen, Ed deHaan, Will Goetzmann, Khaled Hussainey (discussant), Charles Jones (discussant), Jung Koo Kang, Sam Melessa, Alan Moreira, Tyler Muir, Justin Murfin, Joseph Piotroski (discussant), Jonathan Ross, Tjomme Rusticus, Matt Spiegel, Jake Thornock, Heather Tookes, Brady Twedt, Tracy Wang, Tzachi Zach (discussant), Eric Zitzewitz (discussant), and workshop/conference participants at Binghamton University, Yale SOM, Minnesota, HKUST, Hong Kong University, National University of Singapore, CeFARR Conference, BYU Accounting Symposium, Five Star Conference, NBER Behavioral Conference, Midwest Summer Research Conference, FARS 2018 midyear meeting, and LBS Accounting Symposium for their comments. Marina Niessner gratefully acknowledges financial support from the Whitebox Advisors. AQR Capital Management is a global investment management firm, which may or may not apply similar investment techniques or methods of analysis as described herein. The views expressed here are those of the authors and not necessarily those of AQR. An online appendix to this paper can be downloaded at

Publisher Copyright:
© University of Chicago on behalf of the Accounting Research Center, 2019


  • G14
  • G41
  • M37
  • M41
  • advertising
  • investor attention
  • spillover effects


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