Study Says Stock Prices Rise and Fall with Protest Coverage

From the Columbia Journalism Review: Media coverage of protests against publicly traded corporations affects stock prices. The more coverage, the more the price declines. This is the conclusion of two sociologists, anyway, in a paper to appear in the upcoming issue of Administrative Science Quarterly.

The paper, titled “Social Movements as Extra-institutional Entrepreneurs: The Effect of Protests on Stock Price Returns,” examines New York Times coverage of protests against public corporations, from 1962 to 1990. Co-authors Brayden G. King, of Brigham Young University, and Sarah A. Soule, of Cornell University, observed that stories on protests caused a stock price to fall between 0.4 and 1.0 percent, on average. Longer stories resulted in greater declines. Most of the drop happened the day of the protest and the day after it.

The size of the protest appeared not to matter. Neither did the use of boycotts. “What really matters,” King said in a telephone interview, “is that you’re able to gain media coverage.”

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