2015 Reports

Selective Disclosure: The Case of Nikkei Preview Articles

Goetzmann, William; Hamao, Yasushi; Takahashi, Hidenori

Nihon Keizai Shinbun (Nikkei for short) is a leading Japanese daily newspaper specializing in economy and business. It is also the largest vendor of Japanese financial and economic databases. During earnings announcement season, the Nikkei morning edition often publishes “preview” articles that are about companies’ sales and earnings. However, these pre-date the actual company announcements, and forecast more accurately the actual results than the existing forecasts, making the Nikkei forecasts value-relevant information. We identify 2,899 preview articles in the newspaper from 2000 to 2010. We examine the circumstances under which these preview articles are written and the impact they have on the market. Our (preliminary) findings show that the market reacts to the information even before the preview articles are printed, suggesting some leakage of the information to market participants. The costs and benefits (or incentives) for companies, Nikkei, and investors are investigated using changes in returns and information content around the events.