Welcome back to a new PhD Insight. This time we’ve interviewed Nadine Strauß, who has just defended her dissertation on “The Media and the Stock Market: Assessing mutual relationships”. Read on to find out more about her and her research!
What was your academic background before doing a PhD?
I did my Bachelor in Media and Communication Studies at the University of Mannheim in Germany, in which I also spent one semester abroad at the University of Greensboro in North Carolina. I then came to Amsterdam to do the Research Master in Communication Science at the UvA. In the first year already, I knew that I wanted to do a PhD at ASCoR. I really liked the whole process of doing research during my Masters, especially the courses in quantitative methods. My Bachelor was more theory-based and mostly qualitative, so the combination prepared me well for a PhD.
Tell us about your dissertation. What is it about?
The title of my dissertation is “The Media and the Stock Market: Assessing mutual relationships”. This means I investigated to what extent news media coverage influences stock prices or the other way around. I approached this very broad research question from various perspectives, different theories, objects of analyses and a range of methods. To be more specific, I studied different locations – the Netherlands, Germany and the United States – I analysed newspaper articles, online news and tweets. Methodologically, I did a case study on Tesla, interviews and a survey among financial journalists and manual and computer-assisted content analyses with time series analyses.
And what were your findings?
My dissertation brought about five main findings. First, I found that overall daily newspaper articles are not up to date enough to have an impact on stock prices the next day – especially, when we measure them on the aggregate level, and when looking into the amount emotional words. Considering today’s fast-paced news information environment (e.g., Reuters and Bloomberg terminals, news wires, online news, Twitter), it is no surprise that daily newspapers are lacking behind. In fact, in my research I could rather identify intraday price movements of stock due to online news. For example, the Tesla case study has shown that an announcement by Elon Musk about a new product can strongly increase the stock price within seconds. However, as soon as the information becomes more concrete and if expectations are not met, the price can drop again within a wink of the eye.
This related to my second finding, namely the impact of unexpected news or expectations towards company news. For example, I have found that prices of listed companies do not change much during quarterly earnings announcements due to public information (e.g., tweets) if the expectations of the market have been met with the release of the numbers. The third finding is not very surprising, namely that negative news has a negative effect on stock prices. This effect was especially present when looking at single companies (e.g., AEX stocks, IPOs) and when inspecting news on a daily time aggregate and over time.
Fourth, I found that expert opinions and news updates have an impact on stock prices. When experts made a recommendation with regard to the financial market or certain news were repeatedly covered in economic Reuters or Bloomberg tweets, the fluctuations of the DJIA (Dow Jones Industrial Average) were the strongest. Finally, based on my interview study, I can conclude that financial journalists are part of a self-reflexive and self-sustaining financial system. Journalists receive most of their information and insights from the financial institutes themselves (e.g., financial analysts, experts, bankers, corporations). Most of the journalists are aware of these conflicted interests, but due to editorial cutbacks and time pressure, journalists have fewer resources to question sources or consider alternative voices. Thus, I would recommend every reader of financial news to critically reflect upon the content, the sources, and the citations of financial news articles.
What did you enjoy most about your PhD? What was more challenging for you?
I enjoyed most that one can work independently and that you have the freedom to develop your own research ideas, to set up studies and collaborate with colleagues. When I started my PhD, my proposal only consisted of three studies. However, during the process of my first study, I developed new ideas and I identified further research gaps. Eventually, I ended up with an additional case study, a network analysis and a study on initial public offerings in Germany. I think there are only a few jobs where you actually have this freedom and where you also have the time and resources to develop your own skills further. Most challenging was definitely the data management. I had thousands of news articles and tweets to analyse. But thankfully, I had wonderful colleagues who helped me with this and showed me how to do it.
What would you consider your personal highlight during the three years of you PhD?
I have always liked to go to conferences. It is nice to network, to present your work to fellow researchers and get some recognition for your work. That was definitely a great part of my PhD. But overall, I think my time at the University of Southern California in L.A., where I spent three months researching for my dissertation, was one of the highlights during my PhD.
About the author
Nadine Strauß was born on October 16th, 1989 in Bühl, Germany. Having grown up in the Northern Black Forest in Germany, she studied Media and Communication Studies (BA) at the University of Mannheim, including a semester abroad at the University of North Carolina at Greensboro. Thereafter, she completed her Research Master in Communication Science (MSc) with cum laude in 2014. Right after, Nadine started her PhD project at the Amsterdam School of Communication Research (ASCoR) at the University of Amsterdam, with a 3-month research visit at the Annenberg School for Communication & Journalism, University of Southern California. Besides investigating the interrelationships between news media and the stock for her doctoral thesis, she was also involved in research projects dealing with issue management, digital diplomacy, investor relations and trust relationships, framing and cultural change communication processes.
During her studies, she also gained practical experiences in strategic and corporate communication. She did a 3-month internship at the strategic communication department at Bertelsmann SE & Co. KGaA, a 3-month internship and 5-years working student job at the strategy and communication consultancy GAULY ADVISORS, and two short internships and student working jobs at advertising agencies in Mannheim, Germany. Currently, she is employed as an Associate at GAULY ADVISORS – while voluntarily working on a project with the Sustainable Finance Lab in Utrecht, the Netherlands, studying the role of communication in promoting a sustainable financial system in the public and private sector.