This paper identifies the effects of product market advertising on financial markets, and finds that managers strategically use advertising to influence investor attention. First, we document that print ads, especially in weekend business publications, cause an increase in Google searches for company tickers. We further find that ads trigger downward pressure on prices of stocks with recent price increases, consistent with investors exhibiting a disposition effect. In the second part of the paper, we show that managers strategically increase advertising in the weeks around earnings announcements if the earnings surprise is positive, and that this increased advertising decreases the post-earnings announcement drift.
Madsen, Joshua M., et Marina Niessner. Is Investor Attention for Sale? The Role of Advertising in Financial Markets. SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, 17 mars 2015.