Seminar (Dept. of Accounting)

Theme：The Bright and Dark Side of a News Paywall

Speaker：Yi RU, Lecturer, Renmin University of China

Time：2022-03-23 14:00

Address：Room 706, Mingde Business Building

Language：Chinese

ABSTRACT:

We examine the implications of a news paywall for the capital market by exploiting the adoption of a digital subscription model by Caixin.com, a major financial media outlet in China as a quasi-experiment. Using a difference-in-difference research design, we find that news articles at Caixin.com have more original and detailed content and have higher associations with future earnings news after the paywall implementation than before, compared to control media outlets. However, news articles behind the paywall are associated with higher bid-ask spreads relative to other news articles. Further analyses show the paywall leads to a decrease in retail investors’ activities on social media, but an increase in forecast accuracy by analysts who are more likely to subscribe to Caixin.com. Overall, we provide novel evidence that a news paywall improves news quality but also contributes to an unlevel playing field for investors.