Language Commonality and Sell-Side Information Production

I study the effects of language commonality (i.e., sharing a native language) on information production in financial markets. Using a hand-collected data set on the prevalent dialects for 2,091 cities (counties) in China, I identify the effects of language commonality separately from those of shared hometown and geographic proximity. In in-sample tests, language commonality between analysts and CEOs increases the return of trading on analysts’ recommendations by 5.5%. The results mainly stem from less intelligible dialects. Broadly speaking, language commonality can alleviate communication frictions when nonnative languages are used in professional settings. This paper was accepted by Gustavo Manso, finance.

Digitization in the Market for Entrepreneurial Finance: Innovative Business Models and New Financing Channels

Digitization creates new financial channels that complement traditional intermediaries, but may raise concerns over fraud, cybersecurity, or bubbles. Artificial intelligence and machine learning change the way in which traditional investors work. This special issue focuses on economic, cultural, and regulatory determinants of fintech development, and on the new forms of information production and processing engendered by digital entrepreneurial finance. We provide a general overview of digitization in the market for entrepreneurial finance, illustrate how the different articles in the special issue contribute to advance our knowledge, and identify promising avenues for research.

PRODUÇÃO, CIRCULAÇÃO E RECEPÇÃO DO JORNALISMO CONTEMPORÂNEO: BREVE PANORAMA

This text proposes to outline a brief overview of the conditions of production, circulation and consumption of journalism in a social context of deep media coverage, marked by ubiquity and interconnection. Critical-analytical, the article includes a literature review that combines studies of journalism with sociosemiotics, with the premise that media coverage promotes the autonomy of journalistic discourse in time and space and also fosters the access revolution. In the course of the information production cycle, circulation emerges with an instance of repositioning reception, also reconfiguring the role of production and catalyzing new communicative contracts.

Fees, Reputation, and Information Production in the Credit Rating Industry

We compare a credit rating agency’s incentives to acquire costly information when it is only paid for giving favorable ratings to the corresponding incentives when the agency is paid up-front, i.e., irrespective of the ratings assigned. We show that, in the presence of moral hazard, contingent fees provide stronger dynamic incentives to acquire information than up-front fees and may induce higher social welfare. When the fee structure is chosen by the agency, contingent fees arise as an equilibrium outcome, in line with the way the market for credit rating actually works. (JEL D21, D82, D83, G24)

Toward ‘Cultures of Engagement’? An exploratory comparison of engagement patterns on Facebook news posts

Information production, dissemination, and consumption are contingent upon cultural and financial dimensions. This study attempts to find cultures of engagement that reflect how audiences engage with news posts made by either commercial or state-owned news outlets on Facebook. To do so, we collected over a million news posts ( n = 1,173,159) produced by 482 news outlets in three Scandinavian countries (Denmark, Norway, and Sweden) and analyzed over 69 million interactions across three metrics of engagement (i.e. comments, likes, and shares). More concretely, we investigate whether the patterns of engagement follow distinct patterns across national boundaries and type of outlet ownership. While we are skeptical of metrics of engagement as markers of specific cultures of engagement, our results show that there are clear differences in how readers engage with news posts depending on the country of origin and whether they are fully state-owned or private-owned outlets.