Do News Agencies Help Clarify Corporate Disclosure

Many investors rely on financial news agencies for information about companies despite the fact that much of it can be obtained directly from the companies themselves. The key reason appears to be that companies write press releases strategically, emphasizing good news and trying to package bad news, while news agencies deliver the same information in a more balanced and transparent form. News agencies also provide additional information about companies with infrequent press releases. Through their actions, news agencies reduce information asymmetries in the market.